Trade Anxiety

European university leaders are worried about the potential higher education-related impacts of two trade agreements involving the U.S. that are under negotiation.

February 6, 2015

European higher education leaders are concerned that two trade agreements currently being negotiated could cast doubt on the ability of national and regional governments to determine the character of their higher education systems.

At issue are the Transatlantic Trade and Investment Partnership (TTIP), for which negotiators from the European Union and the United States entered their eighth round of talks this week, and the Trade in Services Agreement (TiSA), which is being negotiated between 23 World Trade Organization members, including the E.U. and the U.S.

The higher education-related implications of these agreements, which are being negotiated behind closed doors, are not entirely clear. But in a statement released last week, the Council of the European University Association warned that the autonomy of national and regional governments could be threatened if higher education is subject to international trade rules. It cites as one specific area of concern an “investor-state dispute settlement” provision included in TTIP, which provides a mechanism for corporations to sue host governments before arbitration panels and which many worry will inhibit governments from enacting new and stricter regulations that could undercut foreign corporations’ -- such as U.S. for-profit education companies' -- profits.

"It’s hard to say what concrete outcomes might be, but nevertheless the level of anxiety is high,” said Howard Davies, a senior adviser to the EUA.

In addition to concerns about autonomy, Davies continued, “The second feature that feeds this anxiety is the thought that a huge trans-Atlantic public procurement area would increase the outsourcing of higher education services to for-profit companies. It could increase the already perceptible trend toward marketization of some aspects of higher education, and that in itself would be perceived by many institutions as a threat to their autonomy. Not by all, of course, because some institutions are already extremely entrepreneurial and it’s possible that some institutions will welcome these developments.”

In its statement, the EUA asserts that higher education is “a public responsibility to which all citizens have right of access and not a commodity to be transacted by commercial interests on a for-profit basis. It should not be subject to international trade regimes.”

The EUA says that assurances from government officials that “public services” in general will be protected under the trade agreements are unsatisfactory, as the hybrid public-private nature of many countries' higher education systems means that the negotiations "cannot be conducted with legal certainty and clarity." The EUA calls on E.U. negotiators to refrain from making any commitments in the areas of higher and adult education.

Other higher education groups in Europe have made similar, albeit more strongly worded, statements over the past year. Among the groups that have called for education to be wholly excluded from the scope of the TTIP negotiations are the European Students' Union, the European Trade Union Committee for Education and the University and College Union, in the United Kingdom, which argued in a briefing document from last February that TTIP could potentially undermine policy makers in their attempts to regulate the country’s expanding for-profit education sector: “There is a real danger that U.S. for-profit companies would use the TTIP to litigate against any attempt by an elected government to introduce tighter regulation of the private education sector. The interests of students and taxpayers would be subordinated to the potential costs of legal action by powerful U.S. companies whose primary interest is in making profit.” 

The European Union has maintained that the right of member states to issue laws and regulations will not be compromised under the terms of TTIP and the investor-state dispute settlement mechanism specifically. “Including measures to protect investors does not prevent governments from passing laws, nor does it lead to laws being repealed. At most, it can lead to compensation being paid,” reads a question-and-answer feature on the European Commission Web site. The text goes on to say that “the E.U. is working on providing even greater clarity to ensure that genuine regulatory action cannot be successfully challenged.” 

“TTIP does not pose any risk to education in Europe,” a European Commission spokesman wrote in a statement. “In our bilateral trade agreements we and the member states always exclude publicly funded education from commitments” -- meaning in practice “that foreign companies can't use TTIP to get access to primary, secondary or higher publicly funded education in the E.U.”

“The fact that in many member states, the education sector includes a mix of publicly funded and private operators does not affect this general reservation.”

It seems unlikely that TTIP will become enacted anytime too soon: the negotiations have been protracted and the deal remains highly controversial in Europe (a recent call for public input on the investor-state dispute mechanism attracted more than 149,000 comments). In the U.S., where President Obama is battling members of his own party in pushing for authority from Congress to fast-track approval of trade agreements, the proposed Trans-Pacific Partnership has been much higher profile.

Indeed, while the trans-Atlantic pact has attracted significant attention in higher education circles in Europe, that hasn't been the case in the U.S. A spokesman for the American Council on Education, the closest parallel to the EUA in the U.S., said the group is not tracking the TTIP and TiSA negotiations. Neither is the Council for Higher Education Accreditation, which joined with ACE, EUA and the Association of Universities and Colleges of Canada in issuing a statement about the education-related implications of another trade agreement, the General Agreement on Trade in Services (GATS), back in 2001. 

Higher education groups raised similar questions and issues about GATS, said Roberta Malee Bassett, a senior education specialist with the World Bank and the author of The WTO and the University: Globalization, GATS, and American Higher Education (Routledge, 2006). “The issue went away for a while, it was not resolved, and now it’s come back.”

Bassett said that the EUA statement raises the right questions about the potential impacts of the trade agreements. But she also said that she doesn't see it as likely that national governments will have their authority to regulate their higher education systems undermined. It's not so much a probability, she said, as it is one of a range of potentialities -- like when you send a kid to the playground and there are all sorts of potentialities (he could break his leg!) even though “the probability is they’re going home just fine at the end of the day.”

“These are absolutely the right questions to ask,” she said. “I just don’t think in practice this is what would happen.”


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