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Australian Bilateral Agreements and Higher Education

National Tertiary Education Union (NTEU), Australia (2003 analysis)

Australian Bilateral Agreements and Higher Education

Australia is a party to a number of bilateral agreements with developing countries in the East Asian-South Pacific region. The agreements fall into two categories : comprehensive bilateral free trade agreements (BFTAs) and bilateral investment agreements (BIAs). Both types of agreements have implications for higher education, though only BFATs expressly deal with education services.

Australia approaches bilateral and multilateral agreements from the perspective of an exporter of higher education services with an increasing number of commercial arrangements - twinning arrangements with local private providers, campuses of Australian universities in Malaysia and Fiji - in the higher education systems of countries in the region.

Singapore Agreement Free Trade Agreement (SAFTA).

Singapore and Australia concluded a Free Trade Agreement earlier this year. SAFTA has a services chapter that is ‘ negative list ’ in structure. The GATS is positive list with respect to national treatment and market access, which means these obligations apply only to service sectors that each country agrees to include on its schedule of commitments in successive rounds of negotiations. A negative list agreement in contrast means that all services, including those that may emerge in the future, are automatically bound by the liberalisation obligations of the Services Chapter of the agreement unless listed as exempt at the time the agreement is concluded. Negative list agreements are preferred by the Australian government precisely because they tend to achieve a higher level of trade liberalisation than positive list ones.

Under SAFTA Singapore agreed to recognise the law degrees of the top third of graduates from among full -time students at eight Australian universities. Previously recognition was accorded to law degrees from four universities. Australia agreed that scholarships for Australian studying abroad would be tenable at Singaporean universities. For a broader picture of how SAFTA affects higher education it is necessary to examine the reservations notified by the parties.

In common with other negative list BFTAs, SAFTA has two annexes for reservations. Annex 4-I allows a government to regulate a service sector on the list as the government deems fit, including increasing in future the trade restrictive effect of regulation on foreign providers in the service sector. Annex 4-II merely permits the government to maintain the degree of restriction on trade extant at the time the sector and applicable regulatory measures were listed on the schedule.

The Services Chapter of SAFTA expressly excludes subsidies and grants for higher education and all other services. There are also reservations from Australia and Singapore in the SAFTA text pertaining to education services. This paper looks beyond those reservations because there are other reservations outside the education services area that impinge upon the rights of transnational Australian and Singaporean providers of higher education .For example, does an Australian owned provider in Singapore have full rights to acquire land, use only Australian expatriates as managers and directors of the company, move documents and works of art from a library or gallery at the Singapore campus to Australia, and engage in consultancy activities in Singapore ? What follows below are the Singaporean and Australian reservations for the Services and Investment Chapters of SAFTA that have significant or limited relevance for higher education.


Annex 4.I

Australian service suppliers registering a business in Singapore must appoint a Singapore resident or employment pass holder as a local manager.
Locally incorporated countries must have one director resident in Singapore
Branches of foreign companies registered in Singapore must have two agents resident in Singapore.
Only local tertiary institutions established pursuant to an Act of Parliament may train doctors.

Annex 4.II Reservations

Temporary entry into Singapore to supply a service except for categories such as business visitors and specialists
Alienation or divestment of real estate, land purchase, use, development and land zoning policies.
The full or partial devolvement to the private sector of services in the exercise of governmental authority.
The divestment of equity interests in, and the assets of, any enterprise fully or partly owned by the government.
The creative arts and cultural heritage, including collections held by libraries, museums, and galleries.
Scientific and technical consulting.
Recognition of legal qualifications from Australian universities other than the top third of graduates from full-time law students at 8 universities.
Junior colleges and pre-university centres.
Post-secondary and higher education sports education programs.
Recognition of qualifications for health-related professionals.
Museum services


Annex 4.I

Foreign investment of $A10 million or more to establish new businesses.
Foreign investment of $A50m to acquire or takeover an existing business.
Two directors of a public company must be ordinarily resident in Australia.

Annex 4.II Reservations

Temporary entry to supply a service, except for categories such as business visitors and specialists
Preferences for indigenous persons, organisations, or commercial or industrial undertaking.
Foreign investment in urban land.
The devolvement to the private sector of services in the exercise of governmental authority at the time SAFTA came into force.
The privatisation of government owned entities and assets
Public education and training to the extent that they are social services established for a public purpose.
Creative arts and cultural heritage.
National treatment with respect to the supply of higher education by commercial presence.

Thailand - Australia Free Trade Agreement (TAFTA)

This Agreement is still being finalised and therefore no text is available for detailed scrutiny. However, the NTEU has received some information from the Australian Department of Foreign Affairs and Trade about the contents of the agreement :

TAFTA is a positive list agreement in respect of services because the Thais would not agree to the Australian proposal for a negative list outcome. Subsidies and grants are excluded from the Services Chapter. Two concessions have been made to Australia in respect of the export of higher education services. First, 60% Australian ownership will be permitted for Scientific and Technical institutions outside Bangkok. To date, only one Australian university, the Swinburne University of Technology, has established an institution that meets the criteria. Second, Australian academics will be able to obtain a visa to work in Thailand of 3-5 years in duration, but only after completing an initial one year visa period without breaching the terms of that visa.

Bilateral Investment Agreements

These agreements are about the promotion and protection of investment. Whereas disputes under WTO agreements can only be initiated by the governments of WTO Member countries, Australia’s model for investment and promotion agreements is based on aggrieved foreign investors being able to initiate disputes before international arbitration panels over the actions of governments.

Such disputes may be over expropriation or nationalisation or “ measures having effect equivalent to nationalisation or expropriation” of an investment. Investment is defined as including

 intellectual and industrial property rights,
 business concessions and licences and and any other right to conduct economic activity and having economic value by law or under a contract,
 activities associated with investments such as the organisation and operation of business facilities, acquisition , exercise and disposal of property including intellectual property rights, the raising of funds, and the purchase and sale of foreign exchange,
 every kind of asset,
 tangible and intangible property,.

A key concern about investment agreements is the ability of investors to use them to challenge, or secure compensation for, regulatory action that affects investments as broadly defined above, on the basis that such regulation is a measure equivalent to expropriation.

Australia has bilateral investment agreements with a range of countries, including the Philippines, Papua New Guinea, and Vietnam. The agreements may be used to protect Australian universities’ commercial activities in these countries.

Ted Murphy

National Assistant Secretary


 source: NTEU