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London - Londres

London - Londres. 7 -- VII -- 2005. International Trade of Higher Education. The GATS. Three main focuses. The globalization of higher education International trade of higher education The GATS. Social phenomena. (Inevitable and unstoppable) Information and communication technologies

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London - Londres

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  1. London - Londres • 7 -- VII -- 2005 Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  2. International Trade of Higher Education The GATS Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  3. Three main focuses • The globalization of higher education • International trade of higher education • The GATS Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  4. Social phenomena. (Inevitable and unstoppable) Information and communication technologies Global information Global economy Global trade Globalization Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  5. How the Globalization affects universities? • “Globalization effects on the universities will be more drastic than industrialization, urbanization and secularization combined. It is the biggest challenge the University has faced for more than a century and a half.” (Castells) Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  6. What is Higher Education? • Merchandise • Commodity • Public service • Public good • Service • National value Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  7. Modes of supply and emerging models Professors Mobility Transnational University Branches Students OCDE (2000) 1.6 M students Virtual University Internacional University Internet E-learning (2002) $2500 MM US$ Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  8. What is GATS? The General Agreement on Trade in Services is the first ever set of multilateral rules covering international trade in services. • Agreement (WTO status equivalent UN) • General (140 members) • Trade • Services Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  9. When the GATS was created and why? • At the end of the 2nd. world war and with the objective of promoting the international trade GATT (General Agreement on Tariffs and Trade) was created in 1947. After the famous “Uruguay Round” from 1986 to 1994 it was decided the transformation of GATT to WTO (World Trade Organization) and an agreement for the liberalization of services (GATS) was adopted. Negotiations began 5 year later (2000). Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  10. Main categories of trade in education • Cross border supply. Includes any type of course provided through distance education or internet, testing services or education material which can cross national boundaries (does not require the physical movement of the consumer) • Consumption abroad . Mainly involve the education of foreign students (require movement of the consumer to the country of the supplier) • Commercial presence. Foreign universities, institutions or investors in another country (provider establishes facilities in another country) • Presence of natural persons. Ability of people to move between countries to provide educational services. Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  11. Where are European Universities today? • International relations • Trade • Internet • Trends • Students Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  12. Internationalization of higher education • European “joint programs” • Technical and Administrative Staff • Professors • Students Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  13. Differences between internationalization and globalization of HE • Economic • Geographic • Information and Knowledge Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  14. Key difference • Internationalisation: Can be shaped and influenced by Higher Education Institutions (e.g. mobility, joint curricula, consortia) • Globalisation: An external macro socio-economic process, hardly to be influenced by Higher Education Institutions Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  15. Previous references of trade in Higher Education • Languages • B A Schools • Internet “Materials” Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  16. Teaching in Internet • Graduate and Postgraduate courses • Continuous education (Long life learning) • Specific training courses Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  17. USA references Internet Trends • Colleges and universties are the most wired community on the Web – 83% of all higher education institutions and 100% of universities are online. • College students represent the single largest nongender-based online demographic, constituting 24% of the total number of adult Internet users. • College students spend approximately $105 billion annually, online $1.5 billion, it’s expected to almost triple to $3.9 billion by 2002. Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  18. Other references • African Virtual University • 2001, 24.000 students since 1997, from 17 countries • 2003 restructured – shared site by 34 universities • RMIT Melbourne latest program provider • Tengtu China – 12.000 schools connected early 2003 • networking 6 million students • 2002, 19% of corporate training in US was on-line • Globally $150 billion industry by 2025 Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  19. Other references • Tertiary distance education – world’s fastest growing sub-sector • Canada – 500.000 students – many on-line • Asia has 3.5 million students (2000) – China Central Radio and TV University has 1.5 million – enrolls over 100.000 each year • 30% of all tertiary courses in Russia are distance – 26% in Turkey – 37% in Thailand –Europe approx 900.000 Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  20. Trends in HE Use of ICT for domestic and cross border HE activities. Rapid increase of for-profit entities providing HE domestically and internationally. Increasing cost and tuition fees paid by students of public and private institutions. Need of public institutions to seek alternative sources of funding. Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  21. Trends in HE • Ability or inability of governments to fund the increasing demand for HE • The fact that the business of transnational HE was alive and active before the GATS. • The increasing of private providers is questioning the quality of the programs. Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  22. How will students influence the demand? • Dramatically • According to the information reported by Merrill Lynch (USA investment house) the number of students in 2025 will be around 160 millions which is the double of students in 2002. Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  23. Students in USA(2003) • Total in HE 15.756.000 • Postgraduate students (14%) 2.219.400 • Foreign students (PG) (17%) 377.300 Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  24. Percentage of tertiary foreign students • Switzerland 17% • Australia 13% • Austria/U.K/Belgium 11% • Germany 9% • Demark/France/Sweden 6% • USA 3% • Spain 1% Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  25. Students in European Union • EU (15) 12.563.000 • EU (15 + 10) 15.207.000 • Students mobility (15) 290.000 within EU(2.3 %) (15+10) 350.000 Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  26. Other references • Over 1.6 million international tertiary students abroad in OECD countries in 2001 • Over 580.000 in USA – approx 35% of world total (6,4% inc from 2000) – 6740 in top 20 US business schools • Other significant share of global market include – UK (14%) – Germany (12%) – Australia (9%) – France (8%) • UK in 2001, students from China increased by 67% from previous year – 31% increase from India • New Zealand 300% growth between 1999 and 2002 Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  27. Is there a relation between globalization and international trade? Yes How will this affect the higher education? • Positive view • Negative view Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  28. Positives values • Innovation • New providers • Greater student access • Increased economic gain • New hybridization and fusion of cultures through mobility of people Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  29. Negative aspects • The threat to the role of government • Public service / Public good • Quality of education • Homogenization of culture Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  30. Supports to the trade • Business of transnational education was alive and active before the advent of GATS. • Education is in a large extent a government function and the agreement do not seek to displace the educational system and the right of governments to regulate and meet domestic policy objectives Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  31. Critics to the trade • GATS is a very new instrument and it is too soon to predict ….. • The whole question of the protection of public service is very uncertain and potentially at risk by the narrow interpretation of what means….. • Any subsides given to domestic providers must also be given to foreign providers. • If a foreign provider establishes a branch in a country this must permit to all WTO members the same opportunity and treatment. Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  32. Structure of GATS • First part. Framework containing the general principles and rules. • Second part. National schedules with the list of countries’ specific commitments on access to their markets by foreign providers. • Third part. Annex that detail specific limitations for each sector. Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  33. Subsectors in Education Services Primary pre-school and other primary education services general secondary, higher secondary, technical and vocational secondary, and technical and vocational secondary education services for handicapped students Secondary post-secondary technical and vocational and other higher education services Higher education services for adults who are not in the regular school and university system and includes education services through radio or television broadcasting or by correspondence Adult education services at the first and second levels in specific subject matters not elsewhere classified and all other education services that are not definable by level Other Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  34. World Bank. Trends in Lending Primary & Secondary Education Vocational post-secondary education / Tertiary education Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  35. Enrollment in Private Higher Education (% of total) Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  36. What “other” services related to higher education are included? • Language testing • Student recruitment • Quality assessment of programmes. Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  37. What we think about this related services? • Technological services. • Quality assessment of programmes. These are areas where international trade may grow very quickly under consulting formulas. Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  38. Typology of Barriers to Trade as identified by USA, New Zealand, Australia and Japan Barriers to trade Examples and modes of supply concerned Prohibition for foreign providers • No possibility for foreign supplier to offer its services (all modes of supply) Administrative burden and lack of transparency • Domestic laws and regulations unclear and administered in unfair manner (all modes of supply) • When governmental approval required for foreign suppliers, extremely long delays encountered; when approval denied, no explication given, no information about necessary improvements to obtain it in the future (all modes of supply) • Denial of permission for private sector suppliers to enter into and exit from joint ventures with local or non-local partners on a voluntary basis (modes 1 and 3) Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  39. Typology of Barriers to Trade as identified by USA, New Zealand, Australia and Japan Barriers to trade Examples and modes of supply concerned • Subsidies for education are not made known in a clear and transparent manner (all modes of supply) • Repatriation of earnings is subject to excessively costly fees and / or taxes for currency conversion (all modes of supply) • Excessive fees / taxes imposed on licensing or royalty payments (modes 1 and 3) Fiscal discrimination Accreditation / recognition discrimination • No recognition of titles delivered by foreign providers (all modes of supply) • No recognition of foreign diplomes (mode 2) • No accreditation delivered nationally for foreign providers (modes 1 and 3) Technical discrimination • Restrictive use of national satellites or receiving platforms • Restrictive use of satellites dishes Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  40. How the GATS affects the Bologna process? • If we want a European HE area that is characterised by the fluid mobility of students in terms of geographical, economic and social equity it looks very difficult to follow the GATS model • The debate between competitiveness and cooperation is crucial in the EU area. • Employers should be deeply involved in the HE space construction according to the Bologna process. Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  41. What universities and universities associations said? • The 2002 Porto Alegre Declaration, which was signed by Iberian and Latin American associations and public universities is radically opposed to international trade in education. • The Joint Declaration on Higher Education and the GATS, signed by four associations representing 5.500 American, Canadian and European universities, rather than coming out against international trade, call for a freeze on WTO negotiations on educational services. Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  42. How much money are we talking about? • Global expenditures on education services exceed 2.3 trillion €. • The OCDE in 2001 estimate the value of the international trade in HE in 1999 en 34 billions € in 1995 was estimated in 30 billion €. USA with 33% was clearly the first supplier followed by Australia and UK. In 1995 HE was on fifth place of most exported services in USA. Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  43. How much money are we talking about? • Public expenditure on education continues to grow faster than total government spending, but not as fast as GDP. OECD countries spent an average of 5,5% of their GDP. (Source: Education at a Glance 2002) • Investment house like Merrill Lynch predict that public education will be globally privatized over the next decade and say there is an untold amount of profit to be made when this happens. Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  44. Five Mayor Exporters ES$US million 2000 Prevalence of English speaking countries Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  45. What countries have shown interest? • USA. Education to a large extent is a government function, but most countries permit private education. The proposal envisions that private education will continue to supplement, not to displace, public education • New Zeeland HE sector is vitally important to all countries. Reduction of barriers to trade in HE does not equate to erosion of core public education systems and standards. • Australia Governments must retain their sovereign right to determine their own domestic founding. • Japan It has become extremely important for each country to improve the quality of education and research. Primary interest should be improving quality Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  46. Where are we? • The last negotiation round was open in Doha in December 2001 • Participants shall submit initial requests for specific commitments by 30 June 2002 • Participants shall submit initial offers by 31 May 2003 • March 2003. Possible trading partners meetings and discussions • “Improved offers” before spring of 2004 • 2005. GATS negotiations conclude Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  47. Experiences in other countries • Malaysia (Invitation to foreign universities to establish under a clear regulatory framework) • South Africa (Branch of Australian Universities) • Canada (42% of the universities are actively involved in the export of HE services) • Belgium (HE must be out of GATS) • Rumania (In 10 years, 1/3 of the students are in private universities) • Cameroon (1/3 of the students from secondary have no place at state universities) Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  48. Quality and Accreditation • Free trade is not trade in the absence of quality standards • Increasing transnational education and new legal trade rules require more attention to quality assurance and accreditation of cross border education programs and providers. • Authority for QA, regulation and accreditation for cross border education must be guided by stakeholders of education and not left to trade officials or market. Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  49. Quality and Accreditation • Recognition of academic titles and certificates across countries is directly related to the issues of quality and accreditation • Accreditation and quality services labelled as “Other” in GATS may be the key of the international trade Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

  50. Some key features • a. Students mobility • b. Freedom for mobility and recruitment of professors. • c. Capitals mobility. Investments and benefits expatriation. • d. Technological compatibility for transmission and reception through the satellites and national informatics networks. • e. Difficulties in “translating” degrees into national equivalents and corresponding legal consequences • f. Quality assurance Luciano Galán Universidad Autónoma de Madrid UNICA U. Complutense, 2005

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