EDUCATION AND TRADE
September 2016
1.
WTO
Since the launch
of the Doha Development Agenda (DDA) in 2001 WTO members have not been able to
reach agreement on concluding the DDA and as a result the relevance and future
existence of the WTO has been questioned. Roberto Azevêdo, the WTO
Director-General, has repeatedly warned of “paralysis” and
“existential crisis” as many of the biggest members pursue their trade
liberalisation efforts outside the WTO. The free trade agreements (FTAs)
described below are a consequence of the stalemate at the WTO, which weakens
the relevance of the WTO. However there are minor exceptions to the stalemate
at the WTO. One is the Bali Package, which was agreed upon during the ninth
Ministerial Conference in December 2013. During the tenth Ministerial
Conference of December 2015 an agreement was reached on abolishing export
subsidies for farm exports. However, the aim of concluding the DDA was not
reached, and on the contrary WTO Member acknowledged in the Nairobi
Declaration that they are divided on the future of the DDA.
Recently, the focus has been heavily focused on e-commerce and it is expected
that the next ministerial conference (December 2017) will focus in particular
on e-commerce. The focus on e-commerce is basically due to the current state of
affairs as the world is changing and it is necessary to update the rulebook on
this issue. At the same time it is a topic that is comparatively new to WTO
negotiators and one that has so far not been met with obstacles the way other
long-standing topics of discussion have. According to Azevedo: "It's still
uncertain what can be done, but I think that if we manage expectations and if
we try to do things from a balanced perspective, one that includes both the
interest of the advanced economies and the developing economies, I think you
will see interesting outcomes." It will be crucial to monitor the WTO
developments on e-commerce, especially concerning the links between education
and e-commerce with the developments around e-learning and electronic education
materials.
2.
Comprehensive Economic and Trade Agreement (CETA)
The CETA (Comprehensive Economic and Trade Agreement)
negotiations between Canada and the European Union were launched in May 2009
and a deal was formally concluded in October 2014. The signature of CETA is
planned for the 27 October 2016 during the EU-Canada Summit to take place in
Brussels. During the informal trade meeting of the European Union on 23
September it was agreed that a draft joint declaration on the delivery of
public services, labour rights and environmental protection in relation to CETA
will be presented to the EU Member States on 12 October prior to the Trade Council
meeting on 18 October, where Trade Ministers are expected to approve CETA. The
European Commission submitted CETA to the Council for approval in July this
year. The European Commission proposed CETA as a mixed agreement to be
provisionally applied after the Council’s approval and the consent of the
European Parliament (EP) has been received. The consolidated legally scrubbed CETA text has been published on EC
website in all official EU languages. The Canadian government is promoting
CETA, however it is much more open to meetings and consultations with unions
than the previous government. The ratification process is expected to be quick
in Canada as the Canadian Constitution gives the federal government sole
jurisdiction over the regulation of trade and commerce.
The CETA agreement is the template for the more
contentious TTIP (Transatlantic Trade and Investment Partnership) negotiations.
CETA is therefore also a test case for other similar trade agreements,
including TTIP, being negotiated at the moment. Accordingly, it would be
difficult to argue against TTIP and other similar agreements if CETA is
ratified. CETA itself includes a number of issues of serious concern in general
and for the provision of public services, including education, in particular.
CETA includes, among other things, the controversial, but reformed ISDS
(Investor-State Dispute Settlement) mechanism renamed as the investment court
system, the standstill and “ratchet” clause that lock-in existing levels of
liberalisation, new restrictions on regulatory measures, and new rules on government
procurement. Services are a major component in CETA and this part of the
agreement took considerable time to negotiate. The EU has made significant
commitments in privately funded education services, even if the commitments
vary slightly between Member States because of specific exemptions taken. As a
result, the EU and its Member States are effectively opening the door to
foreign for-profit education providers and are extending new rights to private
investors that go beyond any existing trade commitments. A related problem of
including privately funded education services into trade agreements originate
from the mixed public and private characteristic of most education systems.
Furthermore, there is not a single reference to any exception for public
services or Services of General Interest from the scope of the agreement, only
to governmental authority that is not adequate to protect public services like
education. Consequently, CETA threatens to lock-in and to intensify the
pressures of privatisation and commercialisation of education.
The EP adopted its recommendations on CETA in 2011 where it calls for a State-to-State dispute settlement
mechanism and the use of local judicial remedies to address investment disputes
given the developed legal systems of Canada and the EU. A study comparing
the CETA agreement with the EP’s TTIP recommendations demonstrates that CETA
deviates significantly from the EP’s TTIP recommendations. The EP is waiting
for the Council’s approval of CETA before it starts its own procedure. The EP
debate on CETA may already begin this autumn with a possible vote in early
2017.
3.
Trade in Services Agreement (TiSA)
The negotiations on the Trade in Services Agreement
(TiSA) were proposed by the US and Australia in early 2012 and began in 2013.
TiSA negotiations arose in response to the ongoing impasse in WTO negotiations,
including talks to expand the General Agreement on Trade in Services (GATS).
The participants call themselves the "Really Good Friends of
Services" and are the strongest advocates of service liberalisation. 20
rounds of negotiations have taken place since so far. The last round of
negotiations took place in the week of 19 September. The next round of
negotiations was originally scheduled for the week of 7 November, however in an
attempt to finish the negotiations before the end of the Obama administration
the Parties are now aiming to conclude the agreement by 5-6 December with a
round of negotiations in mid-October. The negotiations had initially drawn out,
however according to EC’s report of the 19th round of
negotiations TiSA participants undertook a
stocktaking exercise and updated the work plan aiming at the conclusion of the
negotiations by the end of the year. The revised offers tabled in May this year
were discussed during the 19th round and a second revision of the
offers are scheduled for October. Furthermore, some Parties presented
complementary analyses in relation to private education, legal services and new
services and mode 4. The TiSA participants include the EU, Australia, Canada,
Chile, Taiwan, Colombia, Costa Rica, Hong Kong, Iceland, Israel, Japan,
Liechtenstein, Mauritius, Mexico, New Zealand, Norway, Pakistan, Panama, Peru,
South Korea, Switzerland, Turkey and the US. Uruguay and Paraguay left the
negotiations in 2015. In the case of Uruguay it was due to public opposition to
the potential serious consequences of TiSA.
The negotiations are held in secret and details on the
proposed TiSA are therefore very limited. However, following a number of TiSA
leaks, the European Commission created a dedicated page on TiSA in an attempt
to increase transparency. However, the fact remains that TiSA is one of the most
secret trade negotiations. In the EU the TiSA mandate was only published
roughly 2 years after its adoption. The EC has published the EU’s initial
services offer (2013) and the revised services offer (2016) on a dedicated TiSA
page. Both services offers includes significant commitments in privately-funded
education services, even if the commitments vary slightly between EU Member States
because of specific exemptions taken. As a result, the EU and its Member States
are effectively opening the door to foreign for-profit education providers. It
is worrying that the European Commission has requested Member States to
reconsider and limits their reservations taken in CETA for TiSA (and TTIP)
negotiations. In the EU’s proposed core text provisions there is not a single
reference to any exception for public services or Services of General Interest
from the scope of the agreement. In the EU’s revised services offer the
definition of public education has been changed and is now aligned with the
more comprehensive[1]
definition in CETA. In the first TiSA services offer it referred only to
“public education”.
Another problematic issue concerns the EU’s public utilities reservation,
which lacks a clear definition[2].
The lack of clarity of the public utilities reservation put the education sector in a vulnerable situation
because it is not included in any of examples listed in the public utilities
reservation. Furthermore, from the EU-Singapore the EU does not seem to consider education a public utility as
there is no footnote to the public utility clause in privately-funded education
services, whereas this is the case for other public services including health
and social services. Another point concerns the linkage between education services and e-commerce, which
becomes increasing important with the developments around e-learning and
electronic education materials.
The European Parliament adopted its TiSA recommendations on 3rd February 2016. The recommendations underlined the
need for the exclusion of “current and future services of general interest and
services of general economic interest from the scope of application of the
agreement (including, but not limited to, water, health, social services,
social security systems and education, waste management and public transport)”.
The EP reiterated that the European Union, national and local authorities
should retain the full right to introduce, adopt, maintain, or repeal any
measures with regard to the commissioning, organisation, funding, and provision
of public services. The EP also stated that this exclusion should be applied
irrespective of how the public services are provided and funded. It also called
on the European Commission to recognise the significant importance attached by
European citizens to high-quality public services that contribute to social and
territorial cohesion. The EP further demands for the introduction of an
unequivocal ‘gold standard’ clause. This clause could be included in all trade
agreements and would ensure that the public utilities clause applies to all
modes of supply and to any services considered to be public services by
European, national or regional authorities, in any sector and irrespective of
the service's monopoly status. This would include education, which was not
previous the case. With just a few votes, the recommendations rejected the inclusion of standstill and
ratchet clauses that would make it impossible to reverse past liberalisations
and lead to ever-increasing levels of liberalisation. The EP calls for enough
flexibility to bring services of general economic interest back into public
control; and maintain the right of the EU and Member States to modify their
level of liberalisation.
4.
Transatlantic Trade and Investment Partnership (TTIP)
The Transatlantic Trade and Investment Partnership
(TTIP) is a comprehensive trade and investment agreement being negotiated
between the European Union and the United States. The talks are intended to
reduce or eliminate barriers to trade in goods and services, guarantee investor
rights, and promote regulatory cooperation. The TTIP negotiations were initiated
in July 2013 and 14 rounds of negotiations have taken place since. The last
round of negotiations took place in Brussels on 11-15 July and the next round is
scheduled for 3-7 October. The negotiations have drawn out and recently a
number of Ministers from EU Member States voiced their frustration with the
TTIP negotiations and suggested either to suspend or relaunch the negotiations
under a different name. However, it is too early to declare the negotiations
dead and the EC has indicated interest in further rounds in the coming months,
however it has recognised that the negotiations are unlikely to be finalised
under the Obama administration. Due to the US election in November the
negotiations are likely to go into a zombie mode until the next administration
has been installed. The groundwork for negotiators began in 2011 when the EU
and the US established the Higher Level Working Group on Jobs and Growth. Its
mandate was to explore the feasibility and potential benefits of a
comprehensive trade agreement covering all sectors. The working group concluded
its mandate by recommending the launch of formal talks.
ISDS is so far the most controversial issue. The
critiques of ISDS stress that modern democratic societies have developed ways
to separate power, i.e. between the legislature, government, and courts. In
contrast, ISDS concentrates power. The ISDS system gives arbitrators the power
to review all decisions by legislatures, governments, and courts, and
importantly it does not observe the separation of powers, it lacks basic
institutional safeguards of judicial independence, and ultimately undermines
democratic decision-making. The EC launched a public consultation on ISDS in
TTIP in March 2014. The EC’s long anticipated report on the public consultation on ISDS in TTIP was published on 13 January
2015. The report presented an analysis of the almost 150.000 submissions
received to the public consultation, of which 97% of the replies were opposed
to the inclusion of ISDS in TTIP or generally against TTIP. The EC has published
a legal proposal for an investment court system
in TTIP. This would mean that a public Investment Court System composed of a
first instance Tribunal and an Appeal Tribunal would be set up instead of the
Investor-to-State dispute settlement (ISDS) mechanism in the case of TTIP. While
the proposal is an improvement compared to the classic ISDS mechanism, the principles
of the investment court system remains the same as the ISDS mechanism and
consequently the investment court system is available only to foreign investors
and thereby gives foreign investors special rights that are not available to
citizens and domestic investors. In addition, the US has expressed its
reservations with the proposal of establishing an investment court system.
The ETUCE Statement on Investment Protection in EU Investment agreement stresses that the
Investor-State Dispute Settlement (ISDS) is a flawed mechanism, which is contradictory
to and limiting on the right to regulate. It raises specific concerns in
respect to the education sector. Private companies could in the future
challenge the quality and accreditation standards through ISDS if they felt
these standards were "disguised barriers to trade" or "more
burdensome than necessary". As emphasised in the statement: "These
quality and accreditation standards are crucial to ensure the quality of
education and therefore ISDS poses very significant risks to the education sector
and democratic decision-making in general". More detailed information on
the problems of ISDS is available in the study “Modalities
for investment protection and Investor-State Dispute Settlement (ISDS) in TTIP
from a trade union perspective”.
Revised services offers were exchanged in July 2015
and currently under discussion. According to the EC report of the 14th
round of negotiations the Parties exchanged factual information on the scope of
their offers. Domestic regulation and mutual recognition agreements were
discussed too and in the EU there is an ongoing consultation with Member
States. It is not evident whether the disagreement on the listing approach has
been solved. The US traditionally uses the negative list approach, while the EU
traditionally uses the positive list approach, but the EU’s services offer is
based on a hybrid approach consisting of a negative list regarding national
treatment and a positive list regarding market access. The European Commission
published its revised services offer on 31 July 2015, however the European
Commission has stated that they expect that majority of the changes will come
later in the negotiations. The framework agreement of the EU’s offer covers a
very broad range of services, while there is not a single reference to any
exception for public services or Services of General Interest from the scope of
the agreement, only to governmental authority which is not adequate to protect
public services like education. In contrast, the framework agreement repeatedly
mentions that measures should “not be more burdensome than necessary”. In
addition, the services offer includes 3 annexes. Annex 1 and 2 applies the
negative list and annex 3 applies the positive list. The reservation on public
education (see footnote 1 on page 3) is a better definition than the one
included in GATS, however the protection may still be limited due to its
location in the annexes rather than in the framework agreement. A proper
carve-out in the framework agreement would apply to annexes and later revisions
and thereby yield better protection to public services, including education.
TTIP intends to include substantial regulatory
cooperation including new rules, standards and procedures in a number of areas
not covered by other trade agreements. There is also a proposal to establish a
Regulatory Cooperation Body (RCB). This body would bring together
representatives of regulatory agencies in the EU and US to monitor the
implementation of commitments made and consider new priorities for regulatory
cooperation including joint development of
future regulations. The European Commission claims that the negotiators
will establish the framework of such a regulatory cooperation and that
regulators will do the "technical work". Nevertheless, the proposal
would mean that the Cooperation Council would consider both new legislation and
non-legislative acts. The regulatory cooperation could potentially imply
potential serious implications for the education sector as the regulatory
cooperation intends to cover authorisation, licensing and qualification requirements.
The European Parliament (EP) adopted with clear
majority its TTIP recommendations on 8 July 2015. The Committee on international trade (INTA) was
responsible for drafting the recommendations, but 14 other committees,
including the Committee on Culture and Education, were involved in the process.
5.
Trans-Pacific Partnership
(TPP)
The Trans-Pacific Partnership (TPP) is a comprehensive
trade and investment agreement covering 40% of the global economy. The TPP was
concluded on 5th October 2015 after more than 5 years of secret negotiations.
On 5th November 2015, the full TPP text was released and on 26 January 2016 the
legally verified TTP text was published. The
following 12 countries are involved: Australia, Brunei, Canada, Chile, Japan,
Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam.
TPP poses potential serious impacts on the education
sector based on an analysis of the final text. Firstly, there is no explicit
carve-out of education, thereby exposing the sector to greater privatisation
and commercialisation and threatening free, public, and high-quality education.
The TPP also places new restrictive rules on intellectual property, and
includes the controversial ISDS (Investor-State Dispute Settlement) mechanism
that gives foreign investors exclusive rights to challenge domestic laws and
regulations, which they feel are unfavourable to their business, before private
arbitration panels. For more information see the EI Briefing Note on the Trans-Pacific Partnership
(TPP).
It is not evident that TPP will pass the US Congress,
in particular not before the November 2016 presidential election. Accordingly,
other TPP countries are also inclined to wait he outcome of the US presidential
elections.
[1]
It reads “The EU reserves the right to adopt or
maintain any measure with regard to the provision
of all education services which receive public funding or State support in any
form, and are therefore not considered to be privately funded.
The
EU, except CZ, NL, SE, SK, reserves the right to adopt or maintain any measure
with respect to the provision of
privately funded other education services (CPC 929), which means other than
those classified as being primary, secondary, higher and adult education
services.
Where the provision of privately funded
education services by a foreign provider is permitted, participation of private
operators in the education system may be subject to concession allocated on a
non-discriminatory basis. ”
[2]
“In all Member States, services considered as public
utilities at a national or local level may be subject to public monopolies or
to exclusive rights granted to private operators.
Public utilities
exists in sectors such as related scientific and technical consulting services,
R&D services on social science and humanities, technical testing and
analysis services, environmental services, health services, transport services
and services auxiliary to all modes of transport. Exclusive rights on such
services are often granted to private operators, for instance operators with
concessions from public authorities, subject to specific service obligations. Given that public utilities often also
exist at the sub-central level, detailed and exhaustive sector-specific
scheduling is not practical.
This reservation
does not apply to telecommunications and to computer and related services.”
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