Report of Education International Taskforce on Globalization, GATS and Vocational Education

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Source: GLOBALIZATION, GATS AND HIGHER EDUCATION  http://bit.ly/1KhW8mG

The Universal Declaration of Human Rights which states that “[e]ducation shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms.” As such, vocational education should never be focused solely on the training of individuals for specific labour market tasks. It must, in addition to assisting students with the acquisition of practical skills, provide them with general knowledge and understanding.

Alternative terms used internationally include technical and vocational education and training (TVET), vocational and technical education and training (VTET), technical and vocational education (TVE), vocational and technical education (VTE), and further education and training (FET).

Introduction

Education International (EI) has long been concerned about the growing threats posed to education at all levels as a result of economic globalization and trade liberalization. EI believes that negotiations taking place under the General Agreement on Trade in Services (GATS), as well as numerous regional and bilateral treaties, could have the effect of intensifying and locking-in the pressures of commercialization and privatization.

Left unabated, this could create significant challenges for students and teachers, and could potentially undermine the quality and accessibility of education.

Vocational education and training (VET) is particularly vulnerable to the pressures of globalization, commercialization and trade liberalization.  Once the primary responsibility of public educational institutions in many countries, the provision of vocational education now straddles the public, private and for-profit sectors.

Market-led economic globalization and labour market deregulation has intensified the commercialization of vocational education at both the national and international levels. Meanwhile, a further immediate danger is arising as vocational education services are being explicitly targeted in the current round of GATS negotiations.

In short, systems of vocational education and training are facing unprecedented challenges. The forces of economic globalization, rapid technological changes, commercialization, privatization and deregulation are radically re-shaping the vocational education and training landscape. What is taught, where it is taught how it is taught and even who is teaching it is being transformed.

On the basis of the resolution adopted at the IVth World Congress in Porto Alegre, EI established this task force to further investigate the current threats posed to vocational education from economic globalization, and to recommend ways to protect the integrity of vocational education, its students, and teachers. In undertaking this work, the task force faced one immediate challenge in coming to a common understanding of what is meant by vocational education and training. There are large differences between countries with respect to both the content and the organization of VET.[1]

In many countries, vocational education and training is understood primarily as post-compulsory education and training, excluding degree and higher level programs delivered by higher education institutions, and providing students with occupational or work-related knowledge and skills. In other countries, however, VET refers to upper secondary education that leads to competence in a skilled craft or to further training as an apprentice. This report, therefore, should be read against this backcloth, with the recognition that descriptions and analyses will not always apply for all countries.

General Principles

1. Education: A Universal Human Right

As stated in the United Nations Universal Declaration of Human Rights, everyone has the right to education, and “[t]echnical and professional education shall be made generally available….” All individuals have the right to equal access to education at all levels and at any age without discrimination and without financial ability to pay determining the ability to pursue studies.

Access to education at all levels is critical to the self-development of all individuals and is the foundation upon which active and democratic citizenship is built. The full participation of citizens in the social, cultural, political and economic life of their communities is largely facilitated by the knowledge, understanding and skills acquired through education.

EI believes that promoting greater access to vocational education and training is particularly important because of the very crucial role it plays in providing opportunities for people from all backgrounds, including those who have been marginalised in the labour market.

2. The Goals of Vocational Education

Educational institutions at all levels must provide individuals with a range of knowledge and skills that allow them to not only pursue meaningful work, but also to participate fully in all aspects of social life.  This principle is enunciated in theUniversal Declaration of Human Rights which states that “[e]ducation shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms.”

As such, vocational education should never be focussed solely on the training of individuals for specific labour market tasks. It must, in addition to assisting students with the acquisition of practical skills, provide them with general knowledge and understanding.  As stated in the UNESCO Convention on Technical and Vocational Education (1989):

Technical and vocational education programs should meet the technical requirements of the occupational sectors concerned and also provide the general education necessary for the personal and cultural development of the individual and include, inter alia, social, economic and environmental concepts relevant to the occupation concerned.

This comprehensive approach to vocational education, however, is today being challenged by a number of forces.  Globalization and the emergence of the so-called “knowledge-based economy” have led many governments and employers to press for the deregulation of labour markets. This in turn is leading to the introduction of reforms to vocational education and training systems. Invariably, these reforms have been dominated by narrowly prescribed economic motivations to ensure vocational education and training more directly contributes to economic competitiveness by enhancing specific skills and competencies of individuals in response to narrowly-defined industrial demands. VET must always be sensitive to labour market demands, but it should do so without sacrificing the commitment to providing students with general knowledge.

3. Education: A Public Good

Education at all levels is devoted to human development and the progress of society.  As such, EI strongly believes that education — including vocational education and training — should be viewed as a public good and not a private commodity. Education should be governed by strong public service principles that emphasize accountability, quality, access and equality of opportunity.

As a public good, the transmission of knowledge and skills that enable people to play their roles as active citizens is a collective responsibility, falling primarily to states. Governments therefore have a critical role to play in funding and regulating a comprehensive and high quality vocational education system that is widely accessible.

The commercialization, individualisation and privatization of vocational education must be strongly resisted.  There is ample evidence to show that the private and for-profit provision of vocational education is driven more by financial and commercial imperatives than by educational, skills formation, equity or public policy objectives.  In many cases, resources are diverted from the direct delivery of education to administration and marketing, and cost-reduction is given higher priority than quality improvement.  Further, the commercialization, individualization and privatization of vocational education has provided governments with an excuse to decrease the level of their funding.  The ascendancy of human capital theory in vocational education and training policy in some countries has led to increasingly narrow definitions of skills, and an increased emphasis on the notion of individual benefit, as opposed to public good, in the debate about funding of the sector.

4. Pursuing Quality Vocational Education

EI believes that quality education is only possible when teachers and staff enjoy decent terms and conditions of employment. Without a dedicated and highly qualified corps of teaching and general staff, quality vocational education is simply not possible.

With the pursuit of industry-driven reforms and deregulation in many countries, however, vocational teachers see that the quality of education they can offer is being compromised.  This is witnessed in the enormous growth in teachers’ workloads, the lack of support services, and the increase in precarious employment.  Economic globalization seems to be accelerating these trends.

In addition, teachers are increasingly not part of curriculum development or the assessment process. Employers and certification agencies are now demanding a greater say over the curricula and are setting new skill standards and certification requirements. Traditionally, in most countries, teachers in vocational education and training worked collaboratively and in partnership with governments, industry organisations, and trade unions to develop relevant curriculum materials and appropriate mechanisms for assessment and certification.  This interaction, when properly balanced, has been vital in the successful development of VET.

In many countries, however, this collaborative model is increasingly being replaced by one in which industry exclusively develops the skill needs, assessment criteria and even the certification tests which then become the standard job requirement.  Trade unions are increasingly being left out of the process, and VET teachers are being relegated to mere program deliverers who are expected to teach to externally developed assessment criteria.

5. The International Dimension of Vocational Education

The sharing of knowledge and skills, and the mobility of students and teachers across borders is important to the development of education and should be encouraged.  However, EI believes strongly that this international exchange must be fair and must be based on educational values, not commercial imperatives.

Today, international vocational education is dominated largely by commercial values.  In particular, the number of private and for-profit on-line training programs has exploded, raising a number of concerns and challenges. E-learning and e-training initiatives, when done properly, can be useful supplements to traditional educational and training practices, and can provide for greater access for individuals not able to attend a classroom.  However, from a pedagogical point of view, e-learning can never be a substitute for in-class instruction or direct contact with an instructor.

On-line learning can also lead to deskilling of teachers through the fragmentation and segmentation of tasks. Moreover, providers of dubious quality are using internet-based education and training simply to cut costs by undermining teachers’ working conditions, particularly in off-shore provision. These providers are routinely able to by-pass established quality and audit procedures.

Furthermore, an unresolved issue in this cross-border supply of vocational education is the appropriateness of transmitting curricula developed within one national framework to students in another.  The danger is that local curricula needs that are often culturally and linguistically specific will be ignored, threatening and undermining aspects of cultural identity and amplifying existing inequalities.

Finally, while globalization has facilitated the international mobility of students and teachers, this has had a devastating impact on many developing countries.  The “brain drain” of highly skilled individuals from the developing to the developed world threatens to further hollow out the vocational education systems of poorer countries.  Moreover, demographic trends and the emergence of a skills shortage in many developed countries, threatens to exacerbate the brain drain.

The GATS: What’s at Stake for Vocational Education?

At its root, the globalization of vocational education and training is being driven by interests whose aim is to create a global and commodified market.  In recent years, one major way that this is being promoted is through international trade agreements, such as the General Agreement on Trade in Services (GATS).

1. What is the GATS?

The General Agreement on Trade in Services, or GATS, is one of several agreements adopted in 1994 as part of the newly-established World Trade Organization (WTO).  The GATS is a multilateral agreement that defines restrictions on a broad range of government measures that affect the trade in services.  Such restrictions are legally enforceable and can be backed up by WTO-endorsed trade sanctions.

As part of a built-in work programme, members of the WTO were mandated to re-launch GATS negotiations in 2000 with the goal of further liberalizing trade in services. Negotiations to expand the scope of the original GATS began in February, 2000 and were subsequently rolled into the so-called “single-undertaking” of the Doha Development Round launched in the Qatari capital in 2001.

Talks were supposed to conclude by January, 2005 but the deadline has now been extended several times. In July 2006, negotiations were suspended but could resume again at moment.

2. Scope and Coverage of the GATS

The GATS is a comprehensive agreement that covers all government measures “affecting trade in services.” Any national and sub-national government rule or regulation that in any way affects the trade in services is subject to GATS and is open to a possible legal challenge from other WTO members.

Only government procurement is explicitly excluded from the GATS. All other laws, regulations, rules, procedures, decisions, standards, administrative actions, and guidelines are covered by the scope of the agreement. Some specific types of measures covered by the GATS include, but are not limited to the following:

  • subsidies and grants;
  • nationality requirements;
  • residency requirements;
  • performance requirements;
  • local content provisions;
  • licensing or training requirements;
  • tax measures;
  • licensing standards; and
  • technology transfer requirements.

a) All modes of supply are covered

The GATS is much more than a traditional free trade agreement. Because it covers every possible way of providing a service internationally, the GATS is best seen simultaneously as a trade agreement, a multilateral investment agreement, and a labour mobility agreement.

The GATS identifies and covers the following four “modes of supply” or ways of trading services internationally:

1) Cross-border supply. This describes services supplied from the territory of one member country to another member country. It applies to all services provided through international mail, telephone, fax, teleconference, and the Internet. In the case of vocational education, an example of cross-border supply would be on-line training and certification programs offered by providers in other countries.

2) Consumption abroad. This mode of supply describes the situation when a consumer of one country travels to another country to purchase a service. For example, this would apply students attending a school or training program in another country.

3) Commercial presence. This refers to services provided by a supplier of one member who is physically present in the territory of another. This covers all foreign direct investment related to services, such as the establishment of overseas branch schools and campuses.

4) Presence of natural persons. This mode of service is provided through the temporary entry of people providing a service from one member country to another. This describes, for example, instructors who travel abroad to teach courses in another country.

b) All service sectors are covered by general obligations

The GATS contains a set of general obligations or “horizontal rules” that apply to all service sectors unless specifically exempted. Horizontal rules include most-favoured nation (MFN) and transparency requirements. MFN essentially prevents discriminatory treatment by requiring member countries to extend to other members the same trade tariffs and market access terms as offered to any other country. Transparency requires members to make public all government measures that affect trade in services.

These horizontal rules apply even to those sectors where a member country has not made a specific commitment. The only exception is those services “provided in the exercise of government authority.” However, these government services are defined very narrowly as “any service which is supplied neither on a commercial basis nor in competition with one or more service suppliers,” [GATS Article 1:3 (c)]. In other words, if a government service is provided on a commercial basis, or if there are other suppliers who compete with public providers, it is subject to the GATS.  Since public services in most countries, including vocational education and training, involve both public and private funding and are delivered by a mix of public, non-profit, and for-profit providers, they would therefore not appear to benefit from this exclusion.

c) Specific obligations

Member countries also negotiate specific commitments to liberalize trade in particular service sectors. Where no limitations are noted, these commitments are subject to two principal obligations — market access and national treatment.

Market access provisions prevent countries from maintaining or adopting measures that restrict the entry of foreign providers into the domestic market.  All measures that place quantitative restrictions on services, limit foreign capital participation, or restrict the types of legal entity (e.g. non-profit or for-profit) of a service supplier in a sector specified by a member are prohibited.

Under national treatment provisions, members are prohibited from treating domestic suppliers more favourably than suppliers from other member countries in those sectors listed in its schedule of specific commitments.

d) Domestic Regulation

In addition to the existing general and specific obligations of the GATS, negotiations are also underway to develop new rules on domestic regulation.  Domestic regulation is understood as measures taken by governments and delegated bodies — such as professional and trade associations — with respect to qualification requirements and procedures, technical standards and licensing requirements and procedures.  The proposed rules would require that these regulatory measures are not “unnecessary barriers to trade in services” and are not “more burdensome than necessary to ensure the quality of the service.”

Domestic regulation rules could have a direct impact on vocational education in several ways. Disciplines developed on qualification requirements could affect professional accreditation, educational requirements, and certification procedures. Rules on licensing procedures could affect regulations and standards related to professional licensing and school accreditation. Technical standards refer to the rules according to which a service must be delivered. This could potentially expose quality assurance requirements in vocational education.

It is important to highlight that domestic regulation disciplines explicitly target non-discriminatory regulations. That is, even if a regulation applies equally to all members and to domestic and overseas providers, it could still be found to be GATS-inconsistent.

The GATS and Vocational Education

In the GATS, trade in educational services is negotiated on the basis of five sub-sectors of education as categorized by the United Nations Provisional Central Product Classification (CPC). These sub-sectors are: primary education, secondary education, higher education, adult education and other education services.

The categories most relevant to VET are secondary education (CPC 922), higher education (CPC 923) and adult education (CPC 924). Vocational education at the secondary level is recorded as a sub-class of secondary education services (CPC 9223). Higher education in GATS covers all post-secondary education, including technical and vocational education services (CPC 9231) as well as higher education programmes leading to a university degree or equivalent (CPC 9239).  Adult education applies to VET provided for adults outside the regular education system.

Overall, education services remain one of the least committed sectors. To date, thirty-five WTO members have made commitments on secondary education services, which may include secondary-level VET: Albania, Australia, Bulgaria, China, Chinese Taipei, Costa Rica, Croatia, Czech Republic, European Community, Estonia, Georgia, Ghana, Hungary, Jamaica, Japan, Jordan, Kyrgyzstan, Latvia, Lesotho, Lichtenstein, Lithuania, Macedonia, Mexico, Moldova, New Zealand, Norway, Oman, Panama, Poland, Sierra Leone, Slovakia, Slovenia, Switzerland, Thailand, and Turkey.

Thirty-seven members have included commitments under higher and vocational education: Albania, Armenia, Australia, Cambodia, China, Chinese Taipei, Congo RP, Costa Rica, Croatia, Czech Republic, Estonia, European Community, Georgia, Hungary, Jamaica, Japan, Jordan, Latvia, Lesotho, Liechtenstein, Lithuania, Kyrgyz Republic, Macedonia, Moldova, Mexico, Nepal, New Zealand, Norway, Oman, Panama, Poland, Sierra Leone, Slovak Republic, Slovenia, Switzerland, Trinidad and Tobago, and Turkey.

Thirty-six members have made commitments on adult education services: Albania, Armenia, Bulgaria, Cambodia, China, Chinese Taipei, Croatia, Czech Republic, Estonia, European Community, Gambia, Georgia, Haiti, Hungary, Japan, Jordan, Latvia, Lesotho, Liechtenstein, Lithuania, Kyrgyz Republic, Macedonia, Mali, Moldova, Mexico, Nepal, Norway, Oman, Poland, Rwanda, Sierra Leone, Slovak Republic, Slovenia, Switzerland, Thailand, and the United States

The Impact of GATS Coverage

At its heart, the GATS is an agreement that commits members to a liberalization agenda, not just by eliminating barriers to trade and investment, but also by encouraging domestic liberalization in the form of privatization, contracting out of public services, and deregulation. This poses a number of risks for vocational education. At its extreme, if vocational education was fully covered by both the general and specific obligations of the GATS, some of the measures that would be potentially exposed include:

  • conditions relating to nationality (such as the requirement in hiring procedures that preference be given to instructors who are citizens or landed immigrants);
  • restrictions on the presence of foreign vocational training institutions;
  • limits on the number of vocational education providers permitted to operate;
  • rules and regulations that favour public or non-profit providers over for-profit providers;
  • regulations that require foreign vocational education providers to partner with local institutions;
  • tax rules that discriminate against overseas schools;
  • restrictions of student loan and student aid programs to citizens or landed immigrants; and
  • restrictions of public subsidies to domestic schools or natural persons.

As well, it appears that other elements of the GATS negotiations may also impact on vocational education. Discussions revolving around electronic commerce, for instance, may directly set rules that could be applied to technologically-mediated learning or virtual education.

a) GATS and Public Education

Most governments maintain that education services generally are not subject to the GATS and are explicitly exempt under Article 1:3. This article provides that all services are covered by MFN and transparency rules except “services supplied in the exercise of governmental authority.” These latter services are further defined as services that are provided “neither on a commercial basis nor in competition with any one or more service suppliers.”

In short, services supplied in the exercise of governmental authority have to meet both criteria of being supplied on neither a commercial basis, nor in competition with other providers to be exempt from GATS. It is unlikely that any vocational education system could pass this test. The provision of vocational education varies from one country to another in accordance with the share of state funding and public delivery, the degree to which private education is available, and the level of competition between education service providers. Mixed systems, allowing the presence of both public and private schools, are common. In fact, most countries in recent years have been promoting greater privatization and liberalization of vocational and adult education.

In this sense, then, a public vocational school could be considered under the GATS to compete for the same students with private, for-profit schools or training institutes. Moreover, if the public institutions enjoy advantages (e.g. public funding, exclusive degree-granting authority, research grants) that are not also available to their private competitors, GATS conflicts may well arise. In such cases, the public institutions would garner no protection from the governmental authority exclusion but instead would be subject to all applicable GATS rules.

Given the mixed nature of most vocational education systems and the presence of both commercial and non-profit providers, the exclusion for services supplied in the exercise of governmental authority is at best subject to conflicting interpretations, and at worst inadequate.

b) Current proposals on Education Services

To date, four countries — the United States, New Zealand, Australia, and Japan — have submitted proposals on further liberalizing the trade in education services. The American proposal calls for the removal of a series “obstacles” to higher education and adult education providers operating in other countries. Obstacles identified include preferential tax treatment of domestic institutions, bans on the presence of foreign institutions, restrictions on on-line learning material from foreign providers, and requirements for foreign teachers entering and leaving countries. The US has also offered to ease its own trade restrictions for higher education and training.  Australia and New Zealand have submitted proposals similar to those in the US document.

Following the Hong Kong Ministerial meeting in December 2005, a so-called plurilateral or collective request on private higher education services has been tabled by New Zealand, and is supported by Australia, Chinese Taipei, Japan, Malaysia and the United States. The request targets the following countries: Argentina, Brazil, Chile, China, European Union, Hong Kong China, India, Indonesia, Korea, Mexico, Oman, Philippines, Singapore, Pakistan, Saudi Arabia, Sri Lanka, Switzerland, Thailand, Turkey, and the United Arab Emirates.

The plurilateral request is an attempt to assure countries that want to protect their public education systems that they can do so at the same time as they agree to open up their “commercial” or “private” education sector. However, the inclusion of commercial vocational education and training in the GATS could well pose a serious risk to the public system.  As noted earlier, the distinction between public and private education and training services is increasingly difficult to draw. Many public institutions now have commercial appendages to promote marketable products or to help secure industry funding and consultancy work. In some countries, “public institutions” also house fully private programs. In short, the division between “commercial” and “public” education services is becoming increasingly blurred. If specific commitments are made on commercial vocational education services, countries could very well unwittingly expose their entire public system to the more onerous market access and national treatment provisions of GATS.

c) Specific Limitations

Most governments, as noted above, have not made specific commitments on vocational and higher education in the GATS. With increasing pressure in the current round of talks to do so, however, many countries are considering making commitments in the education sector while planning to restrict the extent of this commitment through a specific limitation. In other words, a WTO member could make a commitment on private training services but write into that commitment a limitation on market access and national treatment to exempt otherwise non-conforming measures. Most countries have already listed such specific limitations in other sectors.

However, scheduling specific limitations is an extremely dangerous route to take, particularly with regard to vocational education. It is possible to make specific exemptions, but once drafted, they cannot be changed without penalty. Negotiators must also be aware of every possible measure, at every level of government that must be protected. Even where governments recognize that a policy or measure must be protected, they must be able to know how, and when, to make exceptions and impose limitations. In short, GATS country-specific limitations:

  • must be drafted carefully,
  • will be interpreted narrowly,
  • usually protect existing measures, not future policy flexibility,
  • become targets in ongoing negotiations, and
  • cannot be changed without compensation.

Conclusion

There are compelling reasons to be concerned that the GATS poses serious threats to vital public interest regulations, including those governing vocational education and training. The range of affected regulations is extremely broad and existing protections for education and other public services remains inadequate and open to conflicting interpretations.

The exclusion for “services provided in the exercise of governmental authority” has been shown to be far more restrictive than most member countries of the WTO have assumed. This exemption, if it had left governments to define for themselves the services they provided in their exercise of governmental authority, might have been a broad exclusion that preserved the flexibility of WTO members to protect public services from the commercializing pressures of the GATS.

However, negotiators clearly sought to restrict the scope of Article 1:3 by qualifying the governmental authority exclusion by two criteria, both of which must be satisfied for the exclusion to apply. These criteria are that a service must not be supplied on a “commercial basis”, and must not be “supplied … in competition with one or more service suppliers.” Neither of these critical criteria is further defined in the GATS text. All services that do not clearly fit within this scope are covered by the GATS.

At the same time, there is increasing pressure from several WTO members for countries to make specific commitments on vocational education services and to liberalize the entire sector. Commitments made in “commercial” education services may also expose much of the public system. In fact, because GATS is an agreement that contains built-in commitments to progressively liberalize and expand the coverage of all service sectors, commitments made in one sub-sector would unleash pressures to expand the entire scope of education services covered.

Finally, the development of new disciplines on domestic regulation poses some serious challenges and concerns.  Education services are highly regulated in most countries in order to promote quality, protect students, and to ensure that domestic social, economic and cultural priorities are met.  Most countries require both domestic and offshore education providers to obtain accreditation to operate. In addition, providers commonly must meet specified quality standards in order to maintain their authorization to grant degrees and diplomas.  If commitments are taken in education services, domestic regulation disciplines could restrict the ability of governments to enact and enforce these important rules and procedures.

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[1] Alternative terms used internationally include technical and vocational education and training (TVET), vocational and technical education and training (VTET), technical and vocational education (TVE), vocational and technical education (VTE), and further education and training (FET).

 

 

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