aik hoe lim trade in services division, wto [email protected] education services and the doha round

Aik Hoe LIM

Trade in Services Division, WTO

[email protected]

EDUCATION SERVICES

AND THE DOHA ROUND

© Trade Services Division, WTO, Nov 2005

GATS: Structure

Framework Agreement

Annexes covering certain sector- or policy-

related issues

Schedules of Specific Commitments

(one Schedule for each WTO Member)


MEASURES AFFECTING TRADE IN SERVICES AT ALL GOVERNMENT LEVELS

ALL SERVICES(except governmental services and air traffic rights)

GATS: Scope, coverage, definition


MODE

Cross-border Trade (1)

Consumption Abroad (2)

Commercial Presence (3)

Movement of Natural Persons (4)

EXAMPLE (Education)

Distance-learning programme

from country A relayed in B

B’s resident attends a post-

graduate course in A

University from A operates a training center in B

Teacher from A gives courses in B

GATS: 4 modes of supply


Governmental Services

Excluded from coverage are “services provided in the exercise of governmental authority” which, in turn, are defined as services that are supplied “neither on a commercial basis, nor in competition with one or more service suppliers”. (Article I:3).


Is public education covered by the GATS?

No jurisprudence so far

Absence of commercial basis

Absence of competition


Potential inclusion in the scope of the GATS per se has little concrete consequences

• Commitments remain a choice

• A Member can choose NOT to make a commitment

• Of course, no obligation to privatize

• No obligation to open the market to foreign providers


The only “general” obligations that apply in case of inclusion are ...

Most-Favoured-Nation (MFN) Treatment (but

barring all foreigners is MFN consistent)

Transparency obligations

Availability of legal redress

And that is the situation of 100 Members of the

WTO


There is formal “liberalization” ...

... only in sectors in which a country undertakes specific commitments on market access and national treatment

– MA: Absence of quota- type and similar restrictions.

– NT: Non-discrimination with regard to all measures affecting the supply of a service.


What does a commitment mean?

– Applies only to what is covered by GATS

– A commitment does not mean privatization

– Does not mean deregulation


– It means guaranteeing under certain

conditions the participation of foreign services

suppliers alongside the national public and

private ones

– In most instances those foreign service

suppliers were already there (there are even

cases where Members try to attract them)


Specific Commitments If it decides to make a commitment, it can:

• exclude parts of a sector or a mode of supply

• limit market access• discriminate vs. foreign providers• discriminate amongst foreign providers

(via MFN exemptions, PTAs or MRAs)• bind less than the status quo• pre-commit to future liberalisation• maintain a horizontal restriction


Main Provisions Governing Market Access and National Treatment

Market Access– Limitations on the numbers of service suppliers,*

– Limitations on the value of service transactions,*

– Limitations on the number of service operations,*

– Limitations on the number of natural persons in a sector,*

– Restrictions on types of legal entity,

– Limitations on foreign capital participation* Includes limitations in the form of economic needs tests.

National Treatment (non-discrimination)– Measures which modify the conditions of competition

in favour of domestic services or service suppliers


Even after making a commitment, still have some options:

– invoke exceptions (Article XIV)– modify or withdraw a commitment any time

after 3 years - but must pay compensation (Article XXI)

– possible emergency safeguard under negotiation


Why Did Members embrace Commitments?

Because they were comfortable with their existing degree of opening to foreign private providers

Because they felt it worthwhile to bind certain legal guarantees (not necessarily all existing conditions) to those foreigners, probably to create more capacity and attract more diversity


Why Did Members embrace Commitments? (continued)

Because paradoxically those guaranteed conditions may be worse than the former ones or the de facto ones.

Because non-discriminatory domestic regulation (standards, licensing requirements, etc) were not affected by commitments.


And because restrictions limiting market access and national treatment can be scheduled against any commitment taken.


With all that in mind who took commitments on education services

A total of 46 Members (counting EC as one)

32 for primary education36 for secondary education37 for higher education36 for adult education21 for other education services


31

Sector pattern of commitments(Developed/Developing Country Members, November 2004)

0

20

40

60

80

100

120

140

160

Tourism

Finan

cial

Busines

s

Comm

unicat

ions

Transp

ort

Constru

ctio

n

Recre

atio

n

Enviro

nmen

t

Distri

bution

Health

Educatio

n

Developed

Developing


Education in the new services round

• Proposals by Australia, Japan, New Zealand and the United States– acknowledge the central role played by

governments in providing and regulating education

– private education complements, but does not replace public systems

– circumscribed focus (adult and higher education)


Types of barriers identified

• Total prohibition of foreign providers

• Administrative burden and lack of transparency

• Fiscal discrimination

• Accreditation/recognition discrimination

Adapted from Saner and Fasel (2003)


Number of Offers Proposing New Commitments and/or Improvements to Existing Commitments

0

5

10

15

20

25

Sectors

Num

ber

of O

ffers

New commitments

Improvements

aik hoe lim trade in services division, wto [email protected] education services and the doha round

Documents

trade services division

wto slide

education services

governmental services

wto member slide

favour of domestic services

continued n

specific commitments