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Universities at risk under free trade agreements

Academic unions and university associations around the world have long expressed concern that the spread of free trade and other commercial agreements between nations was likely to profoundly impact on their higher education systems.

Despite government assurances that university operations will not be affected by the conditions set down in the General Agreement on Trade in Services and other international commercial arrangements, university heads and higher education unions in Australasia, Latin America and across Europe have warned that their institutions and tertiary systems will not be exempt and must be protected.

In a debate over a Central American Free Trade Agreement in Costa Rica, opponents argued that such free trade treaties could erode human economic and political rights. At the same time, however, they said civic and political rights could be strengthened through direct participation in the formation of ‘fair’ trade agreements.

European rectors speak out

At a meeting of the European University Association, or EUA, on 30 January, university rectors issued a unanimous statement regarding the Transatlantic Trade and Investment Partnership or TTIP, and the Trade in Services Agreement or TiSA.

The rectors said that although the European Commission had declared that public services would be protected, under the existing General Agreement on Trade in Services, known as GATS, higher education could still be affected.

Echoing comments made by other higher education opponents of free trade in countries outside Europe, the rectors said the two agreements raised questions about the ability of national and regional authorities to decide their own higher education provisions. They therefore called on the European Union to make no commitments regarding higher and adult education.

“In the light of information currently available (published and leaked documents, official briefings, statements by governments and the European Commission) on the ongoing trade agreement negotiations, the EUA notes that negotiators regularly offer reassurances that public services will be protected,” the rectors said.

“However, the GATS definition of a ‘public’ service is not adequate where higher education is concerned. Higher education is not administered by the exercise of government authority in the manner of defence, justice and police; it is not automatically excluded from trade negotiations.

“Moreover, higher education fails to satisfy the GATS criteria which allow exemption for services supplied ‘neither on a commercial basis nor in competition with one or more service suppliers’. Many higher education systems include both public and private providers and many public institutions depend on a mix of public and private funding. Such hybridity at system and institutional levels means that trade negotiations such as TTIP and TiSA cannot be conducted with legal certainty and clarity.”

The EUA represents more than 850 universities in 47 countries as well as 33 national rectors’ conferences. The association is also the main voice of Europe’s higher education community and says its mission is to “promote the development of a coherent system of European higher education and research”.

Right of access to higher education

The rectors’ statement said higher education was a public responsibility to which all citizens must have right of access, and not a commodity to be transacted by commercial interests.

The trade agreements involving Europe created uncertainty about the ability of its member states to determine the nature of their higher education systems, the statement said.

This was because the limited scope of legislative action once an agreement had come into force and the requirement that service liberalisation could never be reduced meant that all future services would fall automatically within the scope of the agreements.

“Domestic policy is threatened by the Investor-State Dispute Settlement Mechanism which gives corporations the right to sue public authorities if they consider that local legislation obstructs their ability to generate ‘legitimate’ profit,” the rectors said.

Critics point to examples where trade agreements have opened countries to legal action by foreign companies. When the Canadian province of Quebec decided to put a halt to controversial fracking practices to extract oil, a US company sued in response for US$250 million to compensate it for investments already made in the sector and for lost profits.

Similarly, multinational tobacco giant Philip Morris sued the Australian government for billions of dollars in damages after it passed a law requiring plain packaging in order to deter consumers from buying cigarettes. The US company did not base its case on a US-Australian treaty, but rather through its Philip Morris Asia subsidiary in Hong Kong, which has a trade deal with Australia.

Germany, which supports the free trade agreements in dispute, is facing a lawsuit from Swedish energy giant Vattenfall. The company is suing over Berlin's new laws ordering the phase-out of all nuclear power plants and a shift to clean energy. Invoking the Energy Charter Treaty, an international agreement that provides multilateral framework for energy deals, the company is demanding damages totalling €3.7 billion (US$4.2 billion).

“The secrecy surrounding free trade negotiations prevents the higher education sector from understanding what specific aspects will impinge on its operating environment, not only on learning and teaching but also data collection, research and development, intellectual property and e-commerce,” the rectors said.

“Higher education, unlike trade, is not an exclusive competence of the EU and any commitments made in the two agreements would go far beyond the scope of its complementary competence.”

Secretary General of the EUA, Lesley Wilson, said higher education was a public responsibility which not only supported social cohesion but also addressed the growing needs of Europe’s labour markets.

“It is not a commodity to be transacted by commercial interests on a for-profit basis nor should it be subject to international trade regimes. While greater global governance is desirable, as far as higher education is concerned, it should develop on the model of the UNESCO-supported academic recognition frameworks, designed and implemented by the sector,” Wilson said.

She said internationalisation of higher education had developed at a fast pace in recent years with increasing collaborative research, staff and student mobility, open and distance learning all flourishing. And all without the framework of trade agreements.
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