Globalisation, Societies and Education, Vol. 1, No.

3, November 2003

Hardly Neutral Players: Australias role in liberalising trade in education services

CHRISTOPHER ZIGURAS & LEANNE REINKE
Globalism Institute, RMIT University, GPO Box 2476V Melbourne, VIC 3001, , Australia

GRANT MCBURNIE
Office of International Development, Monash University, Australia

ABSTRACT In this paper we explore the avowedly partisan stance of Australia regarding trade in education services, the governments enthusiastic approach to market liberalisation through GATS, and its response to the concerns of vocal critics including academic and student unions. Education is a major export enterprise for Australia, both onshore and offshore. Education is publicly referred to as an industry as often as a sector, and institutions behave in an aggressively market-oriented manner unthinkable two decades ago. While other major education exporters, including the EU, US and Canada, have showed flagging commitment to pursuing trade liberalisation in education due to opposition from the academic community and little pressure from the industry for such an approach, Australia and New Zealand have come to represent the most ardent supporters of free trade in education. The Australian governments approach has involved making changes to its domestic education regulations to ensure they are consistent with market liberalisation, and facilitating the exploration of concerns through various international forums, including APEC, the WTO and OECD. Issues such as quality assurance, consumer protection, and public subsidies remain high on the list of matters for further debate.

Australia and Australian universities are hardly neutral players. We have grown our trade in education services and in all four modes of supply at a much faster rate than any other country in the world and we are generally regarded (or demonised) as aggressive exporters of education services. (Michael Gallagher, Group Manager Australian Education International, Department of Education, Science and Training 2002a) Education is a major export enterprise for Australia. Indeed, some individual universities have higher export turnover than well-known brand name consumer products. Education is publicly referred to as an industry as often as a sector, and
ISSN 14767724 print; ISSN 14767732 online/03/03035916 2003 Taylor & Francis Ltd DOI: 10.1080/1476772032000141807

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institutions behave in an aggressively market-oriented manner unthinkable two decades ago. In this article we explore the hardly neutral stance of Australia to trade in education services, the governments enthusiastic approach to market liberalisation through GATS, and its response to the concerns of vocal critics including academic and student unions. Since the late 1980s, successive federal governments have encouraged universities to generate external revenue, particularly by enrolling international full fee-paying students and commercialising research, and have obliged universities to do so by reducing levels of public funding. This carrot and stick strategy has been profoundly successful from a financial perspective. Australian Bureau of Statistics figures show that education service exports grew by 2.9% in the financial year 2002. Education remains the third largest export services earner, bringing in AUS$4.1 billion each year, behind tourism ($9.3 billion) and transportation at ($7.6 billion) (Way, 2003). It is the countrys fourteenth largest export earner overall. Australia has grown its trade in education services more rapidly than any other OECD country and has one of the worlds highest proportions of international students in tertiary education, second only to Switzerland (OECD, 2002). This profile is particularly significant for a country whose economic fortunes have in the past been heavily reliant on agriculture and mineral resourcescolloquially, living off the land, or living on the sheeps back (Davis et al., 2000, p. 14; IDP Education Australia, 2002b). Australian institutions success in attracting fee-paying international students built upon decades of scholarship programmes and publicly subsidised international student fees, coupled with government-funded promotional campaigns overseas. As well as dramatically increasing the recruitment of fee-paying international students into the nation, Australian universities and vocational education institutions have been at the forefront of the growth of transnational higher education through the establishment of teaching operations in many countries. By first semester 2002, there were more than 150,000 international students enrolled in Australian universities, comprising some 18% of the countrys student population (IDP Education Australia, 2002a). Approximately two-thirds of the international students were located in Australia, and one-third of students were studying outside Australia in transnational or offshore programmes, in which learners are located in a country other than the one in which the awarding institution is based (UNESCO & Council of Europe, 2000). During the past decade, Australian universities transnational programmes have grown rapidly, particularly in South East Asia, where British, Australian and US universities have been delivering innovative collaborative programmes through local partner organisations such as private colleges, universities and professional associations. Education demand in the region is high. In the year 2000, Asian citizens constituted 43% (or 672,158) of all foreign students enrolled in tertiary education (world total 1,616,056) (OECD education database data at www.oecd.org). It seems likely that world demand for international higher education will continue to grow in the coming decades, and that Australia will remain a major supplier. Many institutions have become very dependent on the income generated from international student fees, particularly public universities and vocational education (TAFE) colleges who have been struggling with declining levels of public funding.

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Marginson and Considine (2000) use the term enterprise university to capture the character of Australian universities, whose managers are focused on generating income and prestige, particularly in the international marketplace: Enterprise captures both economic and academic dimensions, and the manner in which research and scholarship survive but are now subjected to new systems of competition and demonstrable performance. Enterprise is as much about generating institutional prestige as about income. In the Enterprise University, the economic and academic dimensions are both subordinated to something else. Money is a key objective, but it is also the means to a more fundamental mission: to advance the prestige and competitiveness of the university as an end in itself. (p. 5) In recent years, there has been a growing perception by institutions and government officials that Australia may be approaching the limit of its capacity to host in-country international students under current delivery arrangements (Gallagher, 2002b). The most promising space for the expansion of the international enterprise university, and for Australia as an education exporter, is therefore seen by many to lie offshore. The federal government has recently been seeking to use the World Trade Organization (WTO), and its General Agreement on Trade in Services (GATS) in particular, as a means to facilitate the growth of transnational education, where Australian universities see considerable scope for growth. Australias Role in the Uruguay Round Australia played a pivotal role in the Uruguay Round negotiations that brought the GATS into being, positioning itself strategically as a middle power between developing countries and the large economies. Australia was committed to the inclusion of both services and agriculture in the Uruguay Round talks. Although there was much opposition to the inclusion of both in the Uruguay Round talks, Australia was on relatively good terms with negotiators from both sides of the divide. Australias interest in services liberalisation stemmed from the fact that, similar to other developed countries, 80% of its jobs are in the service sector, accounting for two-thirds of GDP and a quarter of total exports (Prieto & Burrows, 2001). Australias credibility as a promoter of services liberalisation was enhanced by its history of strong unilateral liberalisation of trade in services during the 1980s. Developing countries, whose main priority was the inclusion of agriculture, had been dealing with Australia extensively since the 1980s, when it had been instrumental in the formation of the Cairns Group of non-subsidising agricultural exporters, which had given developing countries a vehicle for challenging US and EU subsidies and importation barriers. Australia acted as a facilitator during the Uruguay Round negotiations, mediating between other parties by hosting meetings, providing technical information, clarifying conceptual issues and working to set the agenda. Most of this facilitation was done through the Rolle Group, a regular but informal meeting of service negotiators, which Australia set up and chaired. Australia achieved

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a high level of influence in these early service negotiations and was influential in shaping the scope and language of the agreement (Capling, 2001, p. 212). While Australian negotiators were very involved in negotiations over specific commitments in telecommunications, financial and professional services, little effort seems to have gone into extracting significant undertakings from Australias trading partners in education. As we will see later in the article, Australia is once again positioning itself in a facilitation role in the Doha Round of negotiations, but this time education services figure much higher in the governments priorities, reflecting the dramatic expansion of education exports over the past decade. Responses to the Uruguay Round Australias 1995 GATS undertakings have received little attention within the education sector, both because they seem to have had no appreciable impact on institutions or government policy to date, and because the potential consequences of GATS for the regulation of education services has not been understood within the sector until much more recently (Ziguras, 2003). The most dramatic effect of trade liberalisation on Australian education has been the phenomenal rate of growth of feepaying international students, especially in universities and English-language colleges. This growth however, has not been significantly affected by GATS, since none of the major source countries for international students have made GATS undertaking in education. The one exception to this is the recent entry of China into the WTO, which has both fuelled an increase in student numbers from China and established clearer policies for foreign institutions seeking to establish joint schools in China. During the Uruguay Round negotiations, Australia made considerable commitments relating to private education services in Secondary Education Services, Higher Education Services and Other Education Services but made no commitments related to Primary Education Services or Adult Education Services (DFAT, 2003). There are no special provisions related to the movement of natural persons in education, so lecturers, teachers and educational managers are subject to the same visa conditions as workers in any other sector wishing to work in Australia. Australia made Market Access undertakings for the three other modes of supplycross-border delivery, consumption abroad and commercial presencemeaning that Australian governments will not limit the number of providers, the number of students they may enrol, the legal form of new entrants (cooperative organisation, for-profit company, statutory organisation, etc.) or limit foreign ownership of providers. Australia also committed to National Treatment for cross-border delivery and consumption abroad, which means that governments cannot discriminate between domestic and foreign service providers. One important exception was that Australia did not commit to National Treatment for commercial presence, retaining the option to discriminate between domestic and foreign providers in the allocation of government subsidies. In the research and development services sub-sector, Australia made commitments to Market Access and National Treatment for social sciences and humanities research. This does not apply to government subsidies for research and development, which remain unbound under horizontal commitments (DFAT, 2003).

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There appears to have been very little discussion within the education community in Australia about the implications of these commitments during the 1990s. The National Tertiary Education Union was perhaps the first group to publicise these impacts and to lobby for no further commitments to be made, as will be discussed in more detail below. However, even this group acknowledges that a significant proportion of its members owed their livelihoods to the export success of Australian education providers. These commitments occurred in an era in which neoliberal governments were unilaterally reducing tariffs and import duties, and deregulating and internationalisation of the banking and communication sectors. Private institutions were already able to be established in Australia at the time, and these had not posed any major threat to public institutions except in competition for public funding, and since Australias GATS commitment did not entitle foreign provider to public funding, it did not appear to pose any threat to the integrity of the system as it was currently established (Ziguras, 2003). The Commonwealth government, which is responsible for international relations, had undertaken in 1995 to allow foreign providers to establish a commercial presence, but constitutionally the establishment of new education institutions is a state matter. Prior to 2000 there was no nationally agreed set of criteria for what constitutes a university, an absence of uniformity between state approaches to the establishment of universities, and no clear rules governing regulation of foreign providers. This created a situation in which Australia had committed to allow foreign universities to establish operations but did not have a nationally consistent way of dealing with these requests. This difficulty became a major political issue when a website appeared announcing Greenwich University as Australias newest fully-accredited university, much to the horror of government officials who had never heard of the institution. Greenwich University was founded in St Louis, USA in 1972 and moved its administrative headquarters to Hawaii in 1990. Continuing its Westward journey, Greenwich reappeared in Norfolk Island, off Australias East Coast in 1998, where it had been established with support of the local council and assent from the Administrator of Norfolk Island. The actions of the University, by seeking accreditation from a small territorial council rather than through a state or the federal government, raised major concerns among Commonwealth and state education ministers and the public universities and highlighted the lack of consistent requirements for the establishment and recognition of universities in Australia (Harman, 1999). At the same time, in the face of the protracted review of its bona fides, Greenwich was able to claim that it was the victim of discrimination and ad hoc regulation. The controversy contributed to the federal governments decision, announced in late 1999, to create a national quality assurance system for higher education, and to develop a national accreditation framework for new universities (Osmond, 2000). In March 2000 the Australian governments Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA) endorsed a set of National Protocols for Higher Education Approval Processes, including criteria and processes for recognition of universities and protocols for dealing with foreign higher education institutions wishing to operate in Australia. MCEETYA noted that [u]ntil recently,

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it was taken for granted that a university in Australia was an institution established by specific legislation, but that [r]ecently some organisations have sought to use the title in a business name without seeking such formal authorisation (MCEETYA, 2000, Sections 2.1, 2.2). Acknowledging the shortcomings of existing arrangements, MCEETYA argued that a new nationally agreed approach is particularly desirable to protect the standing of Australian universities nationally and internationally (Section 1.6). To gain approval to operate in Australia, a foreign provider will additionally need to demonstrate that: it is a bona fide institution in its own country, in terms of legal and accreditation requirements; it has academic standards comparable to Australian institutions; and that [a]ppropriate financial and other arrangements exist to permit the successful delivery of the course in the Australian jurisdiction (Section 3.9). The guidelines also reserve the right for the Australian decision-maker to require the proposed courses to be subject to a full accreditation process (Section 3.9). In order to comply with the broad criteria for recognition as a university in terms of the MCEETYA protocols, an institution must demonstrate that it has legal authority and sufficient resources to award higher education qualifications across a range of fields. In addition to legal and financial requirements, the guidelines also stipulate a number of less readily measurable characteristics, including a culture of sustained scholarship, original creative endeavour, free inquiry, commitment of faculty to these values, and organisation structures and processes sufficient to ensure the integrity of the institutions academic programmes. It was these criteria that were used as the basis of the review of Greenwich University, which eventually forced the institution to stop using the name university. The new national standards for universities, which were partly necessitated by Australias openness to new providers under GATS, have recently caused headaches for another new private university. Melbourne University Private (MUP) is Australias first private university to be established as an arm of a public institution, The University of Melbourne. This development was highly contentious within the institution, but allowed for the concentration of lucrative teaching programmes and consultancies within a separate legal entity that was subject to corporate rather than academic governance arrangements. When it was established in 1998, MUP was given provisional accreditation, but a 2001 review found that the university had failed to develop an acceptable research programme (Ramsey, 2001). The MCEETYA protocols state that universities must have a culture of sustained scholarship extending from that which informs inquiry and basic teaching and learning, to the creation of new knowledge through research, and original creative endeavour. The State Education Minister reiterated the governments intention to use this national agreement to ensure that narrowly commercial private universities would not receive accreditation: Universitiespublic and privateare institutions that, first and foremost, are committed to providing education informed by scholarship, and research is an integral component of this commitment. They must also access a range of sources of funding for their teaching and research, increasingly from a diverse range of non-government sources. However, such commercial

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As education journalist Geoff Maslen observed, MUP may be forced to drop its title and become simply what it is, a commercial company selling courses to corporate and government clients (Maslen, 2002, p. 3). This case provides an illustration of the propensity for the principle of nondiscrimination between local and foreign institutions to result in more stringent requirements for local providers. As local and foreign institutions are required to be judged on the same terms, and in terms of the quality of the services they provide, Australian governments have tried to protect local providers from substandard new entrant to the market by formalising requirements that were previously less clearly codified or less rigorously enforced. Using GATS to Further Develop Education Exports Many of Australias major trading partners in education services unilaterally created more open environments for transnational education through the 1990s in order to increase the number and range of higher education places available, and to limit the growth in the number of students travelling abroad to study (McBurnie & Ziguras, 2001). During the 1990s, GATS did not figure prominently in the thinking of Australian education exporting institutions, since few of the countries in which rapid growth in overseas activity was taking place had made significant undertakings on education services during the Uruguay Round. However, Chinas accession to the WTO did involve significant undertakings on education services (and growth in student numbers), and Australian institutions have since become more interested in the GATS as a mechanism to increase access to overseas education markets. One feature of Australias response to GATS is the prominent role of the Commonwealth Department of Education, Science and Training (DEST) in pushing trade liberalisation. In many countries, trade departments push liberalisation both at home and abroad, while education departments are resistant, perceiving little tangible benefit for education exporters and fearing competition to existing local public and private providers. While DEST is ensuring that public funding does not have to be extended to foreign providers, it does not see any need to protect local institutions from new foreign providers. Its major objective is to use the GATS negotiations to gain access to new markets for Australian education exporters, since a major measure of the success of Australian education output is its ability to earn export income. It is not uncommon to hear the Minister proclaim proudly, Worth more than $5 billion in national income, education is now our third largest services exportbigger than wool and close to wheat (Nelson & Ruddock, 2003). Consequently, DEST lobbied the Commonwealth Department of Foreign Affairs and Trade to have education listed among its priority services for the Doha Round.

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In 2001, DEST consulted with education institutions and associations, asking them to identify barriers to educational trade relating to 20 of Australias trading partners, which informed the development of specific requests. Describing the findings, Michael Gallagher, head of Australian Education International, a division of DEST, explained that: Across the four modes of supply, we have identified 233 individual barriers in 19 selected countries that are restricting our trade and investment in education services. In consumption abroad, for example, barriers arise from host economy employment rules, visa requirements and foreign exchange requirements. In commercial presence, barriers include limits on ownership and rules on twinningbarriers that will be familiar to many of you when you are establishing offshore campuses and partnership arrangements. With cross border supply, a major problem is blanket non-recognition of online learning and other forms of distance education qualifications in some countries. (Gallagher, 2003a) The Department also developed a consultation document for state and territory governments, which set out Australias current GATS undertakings and an estimation of the impact of further undertakings. This document described the current regulatory framework for foreign providers operating in Australia, and sought the opinions of state and territory governments on further GATS undertakings. Neither of these consultation documents have been made public, despite calls in the Federal Senate for these and other documents to be tabled by the government to inform parliamentary discussion of the GATS. [1] With regard to exports, the objectives of the Australian government are relatively clear, despite the lack of publicly available information on Australias requests. Expressing a straightforward policy based on economic self-interest, the Department of Foreign Affairs and Trade explains that, Australias basic objective for the GATS negotiations is to improve market access conditions for Australian services exporters. Australia has very significant interests in increasing the export opportunities in this sector, which is a high growth area and offers significant prospects for further growth and employment for all Australians. (DFAT, 2003, p. 10) The approach Australia will take in pursuing these objectives is to try to shape the broad climate in which the negotiations take place, rather than rely primarily on direct pressure on individual countries. Historically, Australias success in the WTO has resulted from its ability to broker deals between a range of members with similar interests. Australia is a small economy with little bargaining power in a multilateral forum, and its already relatively open trade environment means it has few trade concessions to offer in bilateral deals (Capling, 2001). In WTO education negotiations Australias most powerful route to achieving greater liberalisation will likely lie in its ability to act in a facilitation role, coordinating the efforts of a range of

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members who have an interest in particular offers and in broader educational agreements. For example, any request Australia was to make for educational access to a particular education importing country would be closely followed by other education exporters, including the EU, the US and New Zealand. The importing country would likely try to extract counter offers from all of the interested exporting countries, not just the one who made the request. Because the offers operate multilaterally, not bilaterally, a counter offer need not emanate from the requesting country. Instead, when considering a request and deciding whether to make an offer, a member will be considering their bargaining power in relation to a range of others, and they may be more interested in counter offers and other inducements from third countries than from the requesting country. In negotiating Australias requests dealing with education, Australia may engage in cross-sectoral trading or plurilateral trading with other countries with an interest in the offer being sought. Australia would need to make offers in other sectors to ensure positive outcomes for education. However, this is complicated by the fact that those trade restrictions that Australia has retained are mostly in culturally and economically sensitive areas and there would likely be domestic reaction against a change in many of these areas (Capling, 2001, p. 189). However, Australias capacity to engage in cross sectoral negotiations may be limited by the relatively low number of remaining trade barriers and the economic and political sensitivity of those that remain after decades of unilateral liberalisation. In addition, Australian counter-offers in sectors other than education may not in themselves be influential enough to induce other members to undertake liberalisation in education services. Historically Australia has been careful in trade negotiations to avoid the perception that it is prepared to sacrifice the interests of one industry for another and it has made undertakings unilaterally rather than as trade-offs since commitments from Australia are not generally sufficiently important to other countries to elicit counter-offers bilaterally. While cross-sectoral trading is one option, plurilateral trading has much more potential for Australia, since its trading partners will be much more interested in counter offers made by the US, EU and other major players, than they are in counter offers from Australia. Such an approach may involve Australia taking a role as a middle-power facilitator brokering deals between others rather than relying on using its own limited bargaining chips in negotiations. As a result of the issues affecting Australias bargaining power, Australia has in the past used its resources to influence WTO members to make GATS commitments in education in a range of facilitation roles. These roles have been intended to create a climate in which there are multiple and diffuse inducements and rewards for members making commitments in this sector. Facilitation includes activities ranging from initiating plurilateral discussions and negotiations between education trading partners, providing technical information, clarifying conceptual issues and working to set the agenda. On the international stage, Australia has been playing a facilitation role promoting trade liberalisation in education among its trading partners through various forums, including APEC, the WTO, UNESCO and the OECD. Within APEC, Australia and New Zealand jointly directed a study of Measures Affecting Trade and Investment in

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Education Services in the Asia-Pacific Region (APEC, 2000) and more recently Australia organised a thematic forum on trade in education services at the APEC Education Network meeting in Hanoi in 2002. Within the WTO, Australia is one of the few countries to have submitted a negotiating proposal for education services (WTO, 2001), along with the US (WTO, 1998, 2000), New Zealand (WTO, 2001) and Japan (WTO, 2002). Australias negotiating proposal lists numerous impediments to trade, as described in the earlier APEC study. These include visa requirements, foreign exchange requirements, qualification recognition issues, restrictions on ownership and foreign equity, lack of regulatory transparency, employment restrictions, and import restrictions on educational materials. The proposal also included the reassurance that Australia believes that governments must retain their sovereign right to determine their own domestic funding and regulatory policies/measures (WTO, 2001). In response to the mounting level of criticism of GATS in Australia and overseas, DEST has set about trying to reconcile its trade-driven strategy for internationalisation of education with what it calls the culture-driven strategy espoused by higher education organisations, staff and student groups in North America and Europe. Part of this reconciliation involves the Department conceding that Australia has a considerable way to go in developing the cultural dimensions of education internationalisation, which it believes is an important task for ensuring Australias economic competitiveness, social openness, as well as enabling possibilities for personal growth. A second feature of the Departments attempts to reconcile culturedriven and trade-driven approaches is to showcase Australias regulatory frameworks governing international and transnational education, and to provide technical assistance to developing countries who are seeking to increase openness while developing more robust quality assurance systems to ensure that internationalisation does not lead to lowering of educational standards (Gallagher, 2002a). Since the Uruguay Round, Australia has taken steps to develop a comprehensive regulatory framework governing Australian providers operating offshore, foreign providers operating in Australia, the provision of programmes to fee-paying international students, and recognition of qualifications. The central pillar of the regulation of foreign providers at university level is the National Protocols for Higher Education Approvals, as discussed earlier, and similar measures have been adopted in other sub-sectors. In late 2002 Australia ratified the Lisbon Recognition Convention, developed by the Council of Europe and UNESCO, which facilitates mutual academic recognition and mobility of qualifications amongst signatory countries (Council of Europe, 1997). Australia also helped frame the Code of Good Practice in the Provision of Transnational Education, which is included under the Lisbon Recognition Convention and has played an important role in establishing principles of consumer protection and quality assurance in this field (UNESCO & Council of Europe, 2000). With regard to Australian programmes offered overseas, the recent development of the Australian Universities Quality Agency (AUQA) has already had an impressive impact in improving the accountability and transparency of transnational programmes. AUQA evaluates the performance of universities quality assurance measures in relation to international education with reference to the

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Australian Vice-Chancellors Committees Provision of Education to International Students: Code and Guidelines for Australian Universities, to which all Australian universities are signatories (AVCC, 2002). The progressive strengthening of the AVCCs code of practice for international education over the past decade is a credit to the maturity of the sector. Now that AUQA is active in assessing compliance with the AVCCs code, Australia has a reputable quality assurance system for offshore provision, which is an essential element in promoting openness among Australias trading partners. Australian trade negotiators are now able to point to these regulatory measures to demonstrate that high quality and educational standards are compatible with more internationalised educational environments. Australia is emerging as a key participant in the Alliance on Trade in Services, which is headed by Norway to cooperatively explore issues arising from the treatment of education as a tradable service in the WTO and relate these to international quality assurance developments taking place in other international forums (Gallagher, 2003b). The grouping includes Australia, New Zealand, South Africa, Japan, India, Uruguay, Argentina, Chile, Thailand, Peoples Republic of China, Egypt, Senegal, Turkey, Jordan, Kenya and Mexico. This an interesting mix of importing and exporting nations, representing a spectrum of attitudes toward trade liberalisation, but with a shared interest in dealing with issues such as the public good, quality assurance and consumer protection. Explaining Australias interest in this grouping Michael Gallagher made clear the mix of self-interested and cooperative motivations at work: We are very supportive of the Alliance as it may play a significant role in developing a better understanding of the different needs and circumstances of both importing and exporting member economies. It may also help to alleviate some of the concerns and misunderstanding regarding trade in education services. Additionally, given the absence of our major competitors in the Alliance such as USA, UK and Canada, our involvement may give us considerable competitive advantages. (Gallagher, 2003a) Australia is also working with the OECD to host the third international conference on trade in services in Sydney in 2004, the first of was held in Washington in 2002 and the second in Trondheim, Norway in 2003. Domestic Opposition to Further Australian Commitments Despite repeated calls from opposition parties to make information about the GATS negotiation process public, the Australian government indicated that it did not intend to publish detailed descriptions of requests made and received, as the UK and Canada had done. The government also revealed that the Trade Minister would not disclose details of the negotiations to the parliament before committing Australia to new undertakings. In response, opposition parties, who control the upper house of the national parliament, instigated a Senate inquiry into GATS and the proposed AustraliaUS free trade agreement, which will report late in 2003 (Senate Foreign

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Affairs Defence and Trade Committee, 2002). Understandably, this lack of transparency and accountability in the governments handling of GATS negotiations has only served to fuel opposition to GATS, especially since supporters of the WTO have since the Seattle demonstrations been promising to improve the publics access to information about agreements and negotiations. In an effort to appease criticism of the lack of transparency in negotiations, the Department of Foreign Affairs and Trade issued a discussion document in mid-January 2003, some seven weeks before the deadline for initial offers, calling for public comment on the negotiations (DFAT, 2003). While still falling far short of the level of detail contained in UK and Canadian consultation documents, the discussion document did reveal much more information than had previously been available to the public, if rather belatedly and only after much pressure had been put on the Department. According to the Department of Foreign Affairs and Trade discussion document, most of the requests received by Australia asked for full commitments on Secondary Education Services, Higher Education Services, and Other Education Services, while a few also requested full commitments on Primary Education Services and Adult Education Services. Some requests sought clarification as to what types of education services in the Australian system are covered under the different classifications, and others sought more detail about National Treatment exclusions, perhaps to prompt Australia to commit to National Treatment for commercial presence and specify exclusions rather than leaving this mode uncommitted as it is now. In relation to research and development services, Australia received requests to expand its existing commitments on social sciences and humanities research, to also include natural sciences and interdisciplinary research and development (DFAT, 2003). Apart from the lack of transparency and accountability, the most commonly expressed concern about extending the current undertakings is that committing to National Treatment for commercial presence may entitle foreign providers to the same public subsidies as local public institutions. The most vocal groups have been the National Tertiary Education Union (NTEU) and the National Union of Students (NUS), whose critiques take place in a context of mounting concern about the commercialisation and marketisation of Australian education at a time of growing student-to-staff ratios, shrinking science and humanities departments, and decline in government funding (see, for example, Coady, 2000; Cooper et al., 2002). In an era in which public institutions have been struggling to cope with reductions in public spending on education, the possibility of the limited pool of funding being extended to foreign providers causes real concern. Although the government states that there is no requirement for public funding to be extended to private institutions at present, or to foreign institutions if Australia was to commit to National Treatment for commercial presence, some groups fear that a conservative government committed to increasing the role of private providers could use its obligations under GATS as an excuse to carry out domestically unpopular policies. The NTEU suggests that measures voted down in the domestic context may reappear via the international back door (Murphy, 2000). In a similar vein, the NUS maintains that trade liberalisation has become a Trojan horse for the process of the privatisation of education (National Union of Students, 2001, p. 2). While some critiques are voiced

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in the tenor of a moral panic and sprinkled with unsubstantiated assertions, the NTEU case is carefully argued and soberly expressed. It is likely that the union is mindful of Australias position as a major education exporter and international proponent of trade liberalisation, and that a significant number of the unions members owe their academic employment to the presence of international students. Nonetheless, the force of concern (particularly regarding public subsidies) is likely to influence the government not to commit to National Treatment for commercial presence, at least until the matter is clarified within the WTO. These groups are concerned that trade liberalisation rules have reduced the governments ability to steer the development of private education, eroding the commonwealth, state and territory governments ability to control the number and location of universities, the number of students in private institutions, the range of disciplines taught and the level of supply of graduates in particular fields of study. These forms of regulation are seen to be important means for governments to ensure that private sector provision produces public goods that benefit the community broadly. GATS critics have been concerned that Australias current commitments may interfere with governments future attempts to ensure that private institutions meet equity and access targets and that international programmes support the preservation and development of an Australian cultural identity. Publicly, there does not seem to be any interest on the part of governments to limit other governments capacities to fund public education. Along with the US and New Zealand, Australia has submitted a negotiating proposal to the WTO that explicitly recognises that education is to a large extent a government function and that the private sector should supplement, rather than displace, public provision (WTO, 2001). However, these statements do not appear to have reassured most education bodies and public providers, principally because the proponents of trade liberalisation have not adequately explained the practical significance of Market Access and National Treatment undertakings on funding for education to the broader educational community. In Australia, the governments consultation process has tended to focus on industry peak bodies and major providers, while more broad-based consultation and facilitation of public discussion appears to have been avoided. This is a difficult technical area, and public clarification of several points is required in the current round of negotiations. First, it is clearly stated in the GATS that National Treatment and Market Access principles do not apply to government procurement. However, there is considerable disagreement both in Australia and overseas about the extent to which different types of subsidies (such as funding of student places and research funding) would constitute government procurement, and thus be exempted from coverage under the GATS. The fact that local students make co-payments and are increasingly privately funded further confuses this issue. Second, Australias GATS undertakings, like those of several other WTO members, explicitly apply only to private education services, however the meaning of the terms employed to make this distinction between public and private provision remain unclear and a major cause of concern. The Australian government could alleviate these concerns by providing legal opinions on the implications of GATS for existing forms of government funding. We believe that such advice has been obtained by the

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Commonwealth and provided to state governments during earlier consultations, however there is a serious lack of authoritative information on these issues in the public sphere in Australia, and the resulting void has fuelled opposition to further undertakings. Another issue fuelling concern about GATS impact on education is the perception that the Agreement could undermine government-mandated quality assurance mechanisms, such as the recently established Australian Universities Quality Agency. The NTEU holds that It may well be that in attempting to ensure compliance with the GATS, the new quality assurance regimes and other elements of domestic regulation will be stripped of their ability to ensure national quality for the price of global openness, with ultimately, only the market as guarantor (NTEU, 2001, p. 3). The fear is that a WTO panel could overrule Australian quality assurance regulations, in the case of a trade dispute, resulting in a diminution of standards within the country. In the present international climate, the onus is on trade liberalisation advocates like Australia to showcase the ways in which regulatory measures can provide for internationalisation of educational provision while ensuring that the character and integrity of the education system is protected. There is considerable concern in many countries that trade liberalisation would result in a rapid and uncontrolled influx of foreign providers, which government agencies would be powerless to regulate. Those countries that already have relatively open trade environments in education have the capacity to alleviate these concerns by demonstrating the ways in which quality and standards can be rigorously maintained without restricting Market Access or National Treatment. We see the National Protocols for Higher Education Approval Processes as a reassuring sign that new universities, whether of local or foreign origin, must be consistent with the character and standards traditionally expected of Australian universities. However, the government has not pointed to this example to demonstrate the ways in which the Australian system has non-discriminatory mechanisms to prevent the establishment of substandard education providers. Conclusion The Australian government is seeking to play a major role in facilitating a more open trade environment through education services during the remainder of the current round of GATS negotiations, and through bilateral agreements with major trading partners. Australia has existing bilateral free trade agreements covering services with New Zealand and Singapore, is currently negotiating an agreement with Thailand and is seeking to enter into negotiations with the United States. Because Australia has little direct bargaining power in multilateral negotiations, it will likely continue to play a typical middle-power role, seeking to form temporary strategic alliances on particular issues, and using its technical expertise to attempt to play a role in the negotiating process that far outweighs its size. In the current environment, in which national governments are being put under increasing pressure from domestic lobby groups who are wary of international trade agreements that may affect public services, the Australian Department of Education,

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Science and Training is likely to respond by resorting to less fervent advocacy of trade liberalisation, and instead work through a range of international agencies to create international agreements covering education services, relating to quality assurance standards, recognition of qualifications, codes of practice for transnational provision, and so on, that will reassure governments that trade-driven internationalisation does not pose a threat to local providers. Such quality assurance mechanisms do not, however, address the socioeconomic or cultural issues of concern to many education importing countries. At the same time, working through the WTO to clarify the status of public subsidies of various kinds so that the fears of GATS critics are alleviated would be a much more effective use of negotiation resources than attempting to marshal pro-trade allies to pressure other governments to make undertakings whose impacts are not fully understood.

NOTE
[1] Our brief description of the content of these documents is based on numerous conversations with people who have more privileged access. With regard to the first document described, researchers who prepared the document canvassing the views of education providers consulted two of the authors as part of their research. In relation to the consultation document for state and territory governments, we have based this description on conversations with several people with connections to state governments who have read the document closely.

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