Mind the Gats, and keep doors open to everyone

July 2, 2004

Equity and quality are the buzzwords for countries hoping to profit from overseas students, says Stéphan Vincent-Lancrin

Higher education is a major export industry. International student mobility within the leading countries of the Organisation for Economic Cooperation and Development accounts for at least 3 per cent of global services exports - about £24 billion of export revenue. In Australia and New Zealand, educational services rank, respectively, third and fourth among services exports.

This mobility is a growing feature of for-profit education, especially in Asia's emerging and developed economies where demand is met mainly through franchising and twinning arrangements. These countries show high student mobility and their students study mainly abroad in countries where they pay full tuition fees: 70 per cent of Asian students who study in the OECD area opt for the US, the UK and Australia.

Quality, access and equity are the three major challenges posed by cross-border higher education. To deal with them, countries need to establish policies that are unconnected with and unaffected by ongoing General Agreement on Trade in Services negotiations at the World Trade Organisation.

Uncertainty over the impact of the inclusion of education in Gats has caused concern. Does Gats undermine public funding and subsidies, as well as the governments' ability to regulate quality in higher education? The public education sector is, in principle, not covered by Gats negotiations and no member country has expressed interest in including it. Moreover, Gats does not compel WTO members to abandon public funding of higher education or to extend it to foreign institutions or students, unless they decide to make such a commitment - which no country has done. Gats proposes disciplines (akin to a voluntary code) to make sure that measures relating to qualification requirements and procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade in services. But these disciplines do not exist as yet. In any case, the setting of quality standards is outside the scope of Gats.

Finally, while WTO members must be notified of recognition agreements, Gats does not provide for, or seek to undertake, recognition of qualifications.

The commitments made by countries under Gats have been limited and conservative. As the growth of cross-border education has occurred largely in the absence of such commitments, it is likely to continue irrespective of Gats, at least in the short term.

In the meantime, a worldwide lack of transparent information on varying higher education systems leaves room for low-quality or rogue providers.

Well-established institutions might deliver at sub-standard levels when they operate abroad, especially when their programmes are franchised to a local provider. Domestically, a large number of foreign students may have some impact on quality when income generation becomes a major reason for recruitment. National quality assurance and accreditation systems partly resolve quality issues in cross-border student mobility. But programme and institution mobility, as well as for-profit provision, is often beyond their scope. So governments should develop the regulatory frameworks to minimise quality risks associated with cross-border education and to ensure that it respects their national educational and cultural values. This is crucial to protect not only students, but also the reputation and viability of for-profit cross-border education.

Cross-border higher education increases access to study in countries that face unmet demand. But student mobility and foreign education also involve equity issues. Tertiary students coming from low economic and educational backgrounds tend to underparticipate in student mobility. Higher education institutions and governments of exporting countries have not addressed this issue. In Australia, international students represent one in seven students; in the UK, one in nine. If in future international students represent 20 to 30 per cent of their student populations, ignoring the issue may challenge domestic equity policies. Home students could also be displaced by international students, either at system or institution level, on grounds other than academic ones. Programme and institution mobility involves lower personal costs than studying abroad and might become the favoured means of meeting growing demand. But higher education institutions and governments should respect their values on equity if they want to make cross-border education a sustainable business.

Stéphan Vincent-Lancrin is an analyst at the Centre for Educational Research and Innovation within the OECD Directorate for Education.

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