Trade, Education and the GATS: What's in, What's out, What's All the Fuss about?

This paper addresses some of the public policy controversies surrounding the treatment of education services under the World Trade Organisation’s General Agreement on Trade in Services (GATS). The rapid rise in cross-border trade and investment in education services observed in recent years has given new prominence to the role the GATS might play as a force for progressive liberalisation in the sector. The paper provides a synthetic description of the core features of the GATS, highlighting in particular how the four modes of supplying services subject to the Agreement’s disciplines relate to trade in education services. The paper recalls the policy flexibility WTO members retain under the GATS as regards the nature, extent and pace of possible progressive liberalisation. It describes a number of key misunderstandings and fallacies that have tended to cloud a rational discussion of the possible effects of the GATS on trade in education services. The paper also depicts the key elements found in the negotiating proposals on education services put forward to date by the governments of Australia, New Zealand, Japan and the United States, recalling their circumscribed nature and the acute awareness WTO members are showing about the policy sensitivities arising in the sector. The paper concludes with a discussion of the limited role the GATS can be expected to play as a force for change in the education field. The paper argues that many of the impediments that stand in the way of greater cross-border exchanges of education services may be more appropriately pursued outside a trade policy setting.