People's Democracy

THE corporate sector has discovered a trillion-dollar industry. It is yet to be fully explored and exploited. This is a service sector industry in the area of education as 'service' with a huge global market in which students, teachers, and non-teaching employees constitute resources for profit-making. In this industry, the students are consumers, teachers are service providers, and the institutions or companies catering to education services are organisers, and the teaching-learning process is no longer for the building of a nation but a business for profit-making.

Education, at all levels, will continue to grow, because it cultivates the human mind and makes people important and useful in the all-round development of a country. However for the corporate sector it will grow as a big service industry. Global public spending on education at present is estimated to exceed one trillion US dollars, that is about Rs 48,00,000 crore, representing the cost of over 50 million teachers, one billion students and hundreds of thousands of educational institutions throughout the world. Predatory and powerful transnational corporations are targeting public education, particularly higher education, for profit-making. Though predominantly a government supported service, most governments are, as a consequence of neo-liberal economic reforms, withdrawing from it. The government of India through extensive privatisation, commercialisation and deregulation is encouraging this process.

The service sector accounts for more than 60 per cent of production and employment in the advanced industrial countries, on an average. This sector accounts for two thirds of the European Union's (EU) economy and jobs, almost a quarter of the EU's total exports, and a half of all foreign investment flowing from the EU to other parts of the world. More than one third of economic growth of the United States over the last five years has been due to service exports. In 1996, the United States- provided exports of education and training services had reached 8.2 billion dollars, and its trade surplus in education amounted to 7 billion dollars. Higher education was the fifth largest service exported by the US. Therefore, the pressure of the United States on WTO member countries in relation to trade in education service is clearly understandable.

The World Trade Organization (WTO), established by replacing the General Agreement on Trade and Tariffs at the Uruguay Round in 1994, is a forum for corporate interests to push their agenda down the throats of developing countries without any democratic accountability. The General Agreement on Trade in Services (GATS) covered in the WTO, also a product of the Uruguay Round, is a legally enforceable agreement aimed at deregulating international markets in services, including education. Before this agreement, trade agreements used to be in relation to eliminating tariffs and other barriers for the goods produced in one country and sold in other countries. Some services used to be exchanged but there was no mechanism for trade in services, because they were considered to be place specific and thus non-tradeable. According to the European Commission, the GATS is "first and foremost an instrument for the benefit of business."

The objective of GATS is to liberalise trade in services as quickly as possible. It is clear from the preamble of GATS that it is a "multilateral framework of principles and rules for trade in services with a view to the expansion of such trade under conditions of transparency and progressive liberalisation" and with a 'desire' for the "early achievement of progressively higher levels of liberalisation of trade in services through successive rounds of multilateral negotiations."

Equipped with WTO-enforced trade sanctions, the "multilateral negotiations" would expand the takeover of service delivery by transnational corporations in such critical areas as: health care; hospital care; home care; water resources; environmental protection services, and many others.

The WTO has defined and drawn up the rules so as to give itself enormous powers. According to the WTO website, "The GATS is the first multilateral agreement to provide fully enforceable rights to trade in all services. It has a 'built-in' commitment to continuous liberalisation through periodic negotiations. And it is the world's first multilateral agreement on investment, since it covers not just cross-border trade but every possible means of supplying a service, including the right to set up a commercial presence in the export market." The WTO has explicitly stated that one of the advantages of the GATS is that it will help "overcome domestic resistance to change". (Emphasis added)

The US, the European Union (EU), Japan and Canada are the main powers behind the GATS. Though WTO membership consists of nation states, its agenda is shaped by the transnational corporations (TNCs) of these countries that sit on all the important "advisory" committees and determine detailed policy. While denying access to decent healthcare, education, housing, and long-term care to millions of workers and their families the world over, the agreement will confer ever greater political power on these corporations as they control and dictate public policy.

GATS has two components: (i) The framework agreement containing 29 articles, and (ii) a number of Annexes, Ministerial decisions, etc., as well as the schedules of commitments by each member government, which bind them to allow market access, and/or remove existing restrictions to market access. This agreement covers all services, including education.

Basic rules of GATS will apply to services like education in the following distinct ways:

1. A general framework of obligations that applies to all member countries of WTO includes two principles of "Most Favoured Nations Treatment", and "National Treatment".

"The Most Favoured Nations Treatment implies: there should be no discrimination between the members to the agreement.

The principle of "National Treatment" suggests that "each member shall accord to services and service suppliers of any other member, in respect of all measures affecting the supply of services, treatment no less favourable than that it accords to its own like services and service suppliers."

The rules of "most favoured nations" and "national treatment" are thus aimed at eliminating all restrictions on big business. Under these rules, governments must treat each nation's corporations equally, which will effectively end all attempts by the developing countries to insulate their economies to some degree from the world market.

2. Each member country will have to make a request offer for a particular service to be a part of the agreement. That is, a member country can decide which service sector it would like to cover under GATS rule.

3. A member maintaining practices which may "restrain competition and thereby restrict trade in services", is directed to "enter into consultation with a view to eliminating them", when requested by another member. In case of disagreement between members, the Council for Trade in Services "shall refer the matter to arbitration" the decision of which "shall be final and binding on the members."

4. Members have to ensure that all measures are administered in reasonable and impartial manner.

The WTO has defined trade in services in the following four forms as the supply of a service:

1. "from the territory of one member into the territory of any other member." Called Cross Border Supply, this service in education includes any type of course provided through distance education, or Internet, or any type of testing service and educational materials that can cross national boundaries. When the institution of a member country A, provides distance courses, etc., to another member country B, then A is deemed to be exporting education service to B.

2. "in the territory of one member to the service consumer of any other Member." Called Consumption Abroad, this refers to the education of foreign students. When the students of a member country A, move to another member country B, then B is said to be exporting education service to A.

3. "by a service supplier of one member, through commercial presence in the territory of any other member." Called Commercial Presence, this refers to the actual presence of foreign supplier in a host country. This would include foreign universities or providers of a member country A, setting up courses through branches or franchisees or entire institutions in another member country B. A would be deemed to be exporting education service to B. 

4. "by a service supplier of one member, through presence of natural persons of a member in the territory of any other member." Called Presence of Natural Persons in WTO jargon, this refers to when foreign teachers of a member country A, move to teach in another member country B, A would be deemed to be exporting education service to B.

When the services are entirely provided by the government, they do not fall within the GATS rule. For a service to be out of the purview of the GATS rule it has to be entirely free. However, when the services have been provided either by the government partially or some prices are charged (as happens in education where some fees is charged), or provided by the private providers, they shall fall under the GATS rule.

The informal WTO Classification List (W/120) divides educational services into five parts: (a) primary education services; (b) secondary education services; (c) higher education services; (d) adult education, and (e) other education services.

The idea behind this is the creation of an open, global marketplace where services, like education, can be traded to the highest bidder. GATS covers the educational services of all countries whose educational systems are not exclusively provided by the public sector, or those educational systems that have commercial purposes. Since total public monopolies in education are extremely rare, almost all of the world's educational systems fall under the GATS umbrella. In India, we cannot get exemption in education from the application of GATS because education at all levels, particularly at higher education level, is not entirely free (i.e. some fees has to be paid).

(To be continued)