How The GATS Threatens
Fact Sheet Post-Secondary Education
Selling Rights as ‘Services’
The General Agreement on Trade in Services
through “successive rounds of negotiations.”2
The aim then, is to eliminate all exceptions.
(GATS) is one of more than twenty trade Education for Sale
agreements administered and enforced by the
World Trade Organisation (WTO). It is the Under GATS public funding and equal access
services agreement of the WTO and was to post-secondary education are in danger for
signed in 1994 at the conclusion of the two important reasons: because education is
‘Uruguay Round’ of the General Agreement not excluded from GATS and because public
on Tariffs and Trade (GATT). It was one of funding falls under the definition of a barrier.
the trade agreements adopted for inclusion
when the WTO was formed in 1995.1
Education is not excluded
Like the North American Free Trade Supporters of the GATS will argue that public
education is protected because the agreement
Agreement (NAFTA), the fundamental aim of
GATS is to turn the public good and human states that services “provided in the exercise
of governmental authority” are excluded.
rights into commodities or products that can
be bought and sold for profit in the market. However, these are defined as “any service
which is supplied neither on a commercial
The difference is that with GATS the products
are ‘services’ and no area of human life will be basis nor in competition with one or more
service suppliers.”3 In other words, in order to
excluded: education, health care, social
programs, water, and parks that play a vital role be excluded, a country’s education system must
be completely publicly financed and administered
in maintaining our quality of life are all
included in the definition of the ‘services without any private financing or commercial
sector’ that must be open to the market.
Canada’s system of post-secondary education
The ‘liberalisation’ of Services does not fulfil these conditions for exclusion.
There are four important aspects to GATS: First, after two decades of federal and
1. The goal of GATS is to liberalise provincial cuts Canada’s system of post-
secondary education has seen a ‘creeping
international trade in services, which means to
gradually phase out all so-called barriers to privatisation’ in which private funds and
Februar y 2001
commercial interests already exert some
Vol. 7, No. 4 international competition in the services
Document aussi disponible en français sector. A barrier can be a ‘tariff ’ (border tax) influence and control. Today public funds
cover only 55% of the cost of post-secondary
or ‘non-tariff ’ (any law, practice or policy
deemed to restrict competition and trade). So, education and tuition fees cover 32%.
under GATS no tariff or protection Secondly, the payment of tuition fees for
mechanism can be applied to ‘services’. courses could fall within the category of
2. Like NAFTA, GATS entrenches the services supplied “on a commercial basis”.
principles of ‘National Treatment’ (which Thirdly, there are already a myriad of private
holds that investors from all WTO countries for-profit companies in Canada that sell
National Office must be treated in the same way as domestic diplomas for profit. So, the public education
170 Metcalfe St., investors) and the ‘Most-Favoured-Nation’ system is “in competition with one or more
Suite 500 treatment (which holds that investors from all service suppliers.”
Ottawa, ON K2P 1P3 member countries must be treated equally). For these reasons, Canada’s system of public
tel. (613) 232-7394 3. Unlike NAFTA, the GATS agreement post-secondary education is not excluded from
fax (613) 232-0276 specifically targets subsidies and taxation the GATS agreement.
www.cfs-fcee.ca measures as trade barriers.
Attacking ‘Government Monopoly’
4. GATS is not final. Its goal is “a
There is more compelling evidence suggesting
progressively higher level of liberalization”
MT-CUPE 1281 that public funding and equal public access to
“Education is now an post-secondary education are in danger under educational institutions on the same basis as
industry. Canada needs the GATS. This has to do with how the WTO students attending Canadian institutions.
to approach the defines a ‘non-tariff ’ barrier. 4. Under the rubric of unfair subsidies, GATS
In a 1998 document the WTO Secretariat will strip governments of the power to offer
defined potential barriers to treating grants or tax incentives for research and
education as a ‘commercially’ traded service. development at Canadian educational
with the same
They identified: measures limiting foreign institutions as well as any requirement that
ownership of colleges and universities, citizens be given preferential access to the
commitment that we
bring to other sectors.”
nationality requirements, needs tests, benefits of that publicly supported research
- Sergio Marchi, former Canadian restrictions on recruiting foreign teachers, the and development.
Trade Minister, current Canadian existence of “government monopolies” and 5. GATS will force governments to give degree
Ambassador to the WTO and Chair
of the Council for Trade in Services. “high subsidization of local institutions”, not granting authority to private for-profit training
Cited in Maude Barlow “Trading It legally recognizing “foreign education companies. GATS will also ensure that non-
All Away: The WTO Services
Negotiations and the Threat to
providers” as universities, “restricting the governmental bodies exercising delegated
Canada’s Public Health and granting of university degrees to domestic governmental authority (such as teachers
Educations Systems” March, 2000.
institutions” and not allowing students colleges or professional associations) recognise
enrolled in these institutions to qualify for degrees and diplomas granted by foreign
“There are a number “financial assistance.”4 colleges and universities, including private for-
of education services
profit training companies.
that are on a
commercial basis and
GATS Will Destroy Public 6. GATS will eliminate residency requirements;
it is something that Education for example, that members of governing
can certainly continue boards live in the community or that first
to be an object of The message here is clear. Under GATS, preference for teaching positions be given to
discussion and Canada’s public system of post-secondary qualified residents of Canada.
eventually negotiation education will be destroyed.5
7. Because GATS covers taxation measures, it
between countries 1. The GATS will ensure that foreign-based will eliminate preferential tax treatment for
who want to do that. ” colleges and universities, including private Canadian universities and colleges and other
- Pierre Pettigrew, Canadian Minister
of International Trade, Toronto Star,
companies selling degrees and diplomas for educational institutions vis-à-vis foreign
November 16, 1999. profit, will be guaranteed access to the educational ‘service providers’.
Canadian ‘educational market’. Private for-
“Essentially, the GATS profit training companies will have the rights Conclusion: A ‘Corporate Charter of
is mandated to restrict to invest within Canada, to provide services to Rights’
government actions in Canadians from abroad, to provide services to
Because it can challenge democratically agreed
regards to services Canadians travelling abroad and to send their
upon laws, policies and practices, the GATS by
through a set of legally staff into Canada on a temporary basis.
its very design is about more than just trade in
binding constraints 2. Because GATS covers ‘subsidies’, it will services. It is a corporate charter of rights that
backed up by WTO- force governments to provide foreign transfers unprecedented new rights to
enforced trade institutions and private for-profit training investors and transnational corporations. With
sanctions. Its most companies with the same grants, financial GATS citizens will lose democratic control
fundamental purpose assistance and other subsidies that they over their economy and will be stripped of
is to constrain all levels provide to Canadian colleges and universities. their power to use legislation to govern in the
of government ... and public interest.
to facilitate access to 3. GATS will force governments to provide
government contracts student loans, bursaries and other financial
by transnational assistance to students attending foreign
corporations in a
multitude of areas, ________________________________
including public 1
For an overview of the GATS and Canada’s negotiating positions, see: Scott Sinclair, Sequel to Seattle: GATS, How the WTO’s New “Services”
Negotiations Threaten Democracy (CCPA, 2000); Steven Shrybman, The World Trade Organization: A Citizen’s Guide (CCPA/Lorimer, 2000) and Maude
health and education.” Barlow, “A GATS Primer” (February 8, 2001, available at: http://www.canadians.org/campaigns/campaigns-tradepub.html).
- Maude Barlow, Volunteer National General Agreement on Trade in Services, “Progressive Liberalisation”, Part IV, Article XIX.
Chairperson, The Council of General Agreement on Trade in Services, “Scope and Definition”, Part I, Article I, 3.(b)-(c); “Government Procurement”, Article XIII.
Canadians, “A GATS Primer”, Council for Trade in Services, World Trade Organisation, “Education Services”, document S/C/W/ 49 Subsection 3, (September 23, 1998).
February 8, 2001 This section is drawn from the following excellent analysis: “General Agreement on Trade in Services (GATS): What’s at Stake for Post-
Secondary Education”, The Canadian Association of University Teachers, September 17, 1999, pages 2-3.
Canadian Federation of Students • How the GATS Threatens Post-Secondary Education • Page 2