General Agreement on Tariffs and Trade

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					                                              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
                                                                                            purposes.
                                        sector’ that must be open to the market.



    2001
                                                                                            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
2001
1999
    Fact Sheet
   “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
   international
                                             In a 1998 document the WTO Secretariat                                   will strip governments of the power to offer
   marketplace for
                                             defined potential barriers to treating                                   grants or tax incentives for research and
   educational services
                                             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
   discipline and
                                             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).
                                             2
   - Maude Barlow, Volunteer National          General Agreement on Trade in Services, “Progressive Liberalisation”, Part IV, Article XIX.
                                             3
     Chairperson, The Council of               General Agreement on Trade in Services, “Scope and Definition”, Part I, Article I, 3.(b)-(c); “Government Procurement”, Article XIII.
                                             4
     Canadians, “A GATS Primer”,               Council for Trade in Services, World Trade Organisation, “Education Services”, document S/C/W/ 49 Subsection 3, (September 23, 1998).
                                             5
     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