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General Agreement on Trade in Services (GATS)

14 April 2003

The General Agreement on Trade in Services, or GATS, is one of many trade agreements within the World Trade Organisation (WTO).

It is a complex framework agreement covering 160 different service sectors, encompassing the different ways in which services can be produced, sold and consumed. As with all agreements in the WTO, GATS is intended to undergo constant 'progressive liberalisation' through negotiations in the Council for Trade in Services.

UCU is monitoring developments in conjunction with Education International and other organisations. Although we achieved a victory early in 2003, when the European Commission confirmed that higher education would not be included in the initial GATS talks, we remain vigilant of future developments.

Though UCU (separately as AUT and NATFHE) signed a petition some time ago alongside other organisations urging ministers to keep education out of GATS, we are aware that a new round of negotiations is underway. This will culminate in further negotiations under the WTO in Hong Kong in December 2005. While it is clear that there are major problems outside of trade in services yet to be resolved in these negotiations, it is a concern to us that higher education or service sectors could be used as bargaining tools in the whole WTO process.

We have lobbied the UK government to impress upon them the impact of entering higher education under GATS, and though they have given an indication that they do not believe this is imminent, there is always the danger that minds could be changed at the last minute.

The petition was just one way that we, alongside employers representatives, Universities UK, have been lobbying MPs to get this message across. We have also held regular meetings with DTI and DfES. For more on this and our latest action, see 'Immediate involvement in anti-GATS campaign' (AUT-LA7399, Sep 03).

Why will GATS affect higher education?

On the face of it, the agreement protects public services. However, the wording is ambiguous and protection only extends to public services that are 'supplied neither on a commercial basis, nor in competition with one or more service suppliers'.

Bearing in mind the majority of universities have some commercial element and that there is more than one university supplier, UK higher education (HE) is unprotected by this clause and therefore open to liberalisation under GATS.

How will GATS affect higher education?

If HE is included under the GATS framework, our members can expect detrimental effects in public funding, casualisation, professional autonomy, quality, academic freedom, Intellectual Property Rights (IPR), and student access. Essentially it would lead to the MacDonald's-isation of HE.

The GATS agreement itself specifies four ways in which higher education can be supplied through trade that we think will affect the UK sector:

  • The supply from overseas via distance learning - there are already e-learning initiatives around the world. In the future we may see UK students receiving lectures over the internet for degrees awarded by overseas universities. The impact on UK university employment could be massive;
  • Consumers travelling to another country to study - this could well increase under GATS;
  • Supplier setting up a commercial presence in another country - potentially the most damaging for the UK. An example would be a US university setting up a base in the UK in direct competition to UK institutions. Under GATS, 'national treatment' obligations mean that foreign suppliers would receive treatment 'not less favourable' than domestic suppliers. This means public sector funding would have to be on an equal basis with domestic institutions;
  • Persons from one country entering another to supply services, again along existing lines - there is a danger that cheap academic labour may put downward pressure on pay growth.

In terms of national competitiveness, any IPR generated in this country may belong to overseas suppliers, while academics contractually providing online content may not be able to replicate their work elsewhere due to copyright laws

The obligation to treat overseas suppliers no less favourably may lead to a restructuring of public funding for student access. Supply of HE may become differentiated on financial ability of the consumers and quality may become more diverse than at present. If this occurs, inequality of access will become a greater issue.

Currently there are domestic regulations that prevent some of the above situations occurring. However, if the UK government committed HE within the GATS framework, these regulations would have to be changed.

GATS timetable:

  • Final WTO negotiations in the Doha round were held in Hong Kong in December 2005 (see Education International conference statement below).
Last updated: 5 July 2007