Do free trade deals pose a threat to higher education?
University World News | 21 October 2016
Do free trade deals pose a threat to higher education?
by Tino Brömme and Barnaby Britten
The awareness of the threat posed to the public realm by international ‘free trade’ agreements such as the Transatlantic Trade and Investment Partnership, or TTIP, between the economies of the European Union and the United States has been heightened by the publication of new leaks and criticism from leading intellectuals such as Noam Chomsky and Julian Assange.
The general public is, however, less conscious of the fact that these treaties also “pose significant risks to public education… and could have the effect of locking in and intensifying the pressures of privatisation and commercialisation,” as the European Trade Union Committee for Education, or ETUCE, has warned.
The European university sector, precisely because of its almost entirely publicly funded and intensely regulated status, is seen by the negotiating parties as a prime target to be opened up to the market and wrested from state control.
‘Free trade’ is in actual fact a misnomer. In reality it means to legally secure investment in foreign markets. Consequently, interest groups such as ETUCE and the European University Association unambiguously demand that education be excluded from the agreements.
US companies hold a strong position in the field of education services, which is apparent from the growing export and surplus of these services since the 1990s, and the US’s chief negotiator, Dan Mullaney, has publicly stated the intention of the US to expand liberalisation for all education services in TTIP.
But it would be an easy mistake to see the pressure as coming exclusively from America: equally, the EU is reluctant to consider the possibility that education might be exempted from the scope of trade negotiations because of the aggressive export interests of member states with more clout in the knowledge economy, such as Germany, the United Kingdom, France and the Netherlands.
More specific information on individual nations’ interests can be found in a leaked document obtained by the BBC in 2015, titled "Trade in Services and Investment: Schedule of specific commitments and reservations". In this document several European countries outlined their ‘red-lines’ of how far they wanted education in the remit of TTIP.
France, Greece, Italy, Denmark, Slovakia and the Czech Republic wish to retain the right to choose national educational service providers. Austria, Bulgaria, Cyprus, Finland, Malta, Romania and Sweden want privately funded higher education services restricted. Staying true to its market-oriented approach to the sector, the UK made no reservations whatsoever to the implications of TTIP for higher education, but Brexit might make that irrelevant anyway.
The North American Free Trade Agreement, or NAFTA, provides a precedent from which to assess the potential consequences of TTIP for European education. In this trade agreement from 1994 between the USA, Canada and Mexico, around one million jobs were lost in the USA, mostly those of people with lower educational qualifications, according to Public Citizen’s Global Trade Watch.
The envisaged modernisation of the Mexican higher education sector through NAFTA failed to materialise: the workforce remains largely low paid and unskilled. TTIP would likely have the same effect on poorer EU nations, which would certainly not be desirable in the current centrifugal political climate of the Union.
This problem has already reared its head in Europe as demonstrated by European Court of Justice rulings against Greece, Italy and Spain, and an infringement procedure against Slovenia. EU law acts upon the legal precedents set by previous rulings as quasi-laws, and on several occasions EU member states have defied these rulings to deny foreign private suppliers recognition of their degrees.
“In the case of Slovenia’s still undetermined procedure that would mean a considerable loss of quality for our prestigious higher education institutions,” says the Slovenian university researcher and expert on the liberalisation of education, Klemen Miklavic. He adds that this threat would be considerably higher under the terms of the free trade agreements.
Even if the Maastricht Treaty guarantees the educational sovereignty of a country, these European Court of Justice rulings indicate that ‘market freedom’ is ultimately put first. Specialist law firms are already salivating at the ambiguities in the definitions of ‘public education’, ‘adult education’ and ‘professional services’.
This could leave public universities unprotected, even if ostensibly they prevent the inclusion of educational services in TTIP.
Education explicitly mentioned
However, in the gigantic Trade in Services Agreement, or TiSA, between 52 countries, education is explicitly mentioned. According to TiSA documents published by WikiLeaks, “states would be prohibited from requiring [educational] services to have a local presence, or from limiting the participation of foreign capital in such services”.
This would be of great interest to corporate giants such as Pearson, the Bertelsmann Group, online education providers like Coursera and in the near future why not also Silicon Valley tech firms. After all, investment dollars in ‘ed tech’ grew by a staggering 503% between 2010 and 2014, as noted by tech market analysis platform CB Insights.
TTIP, and also the Comprehensive Economic and Trade Agreement, or CETA, between Canada and the EU, affect education more indirectly. Central components of the agreements such as freedom of establishment, the principle of equal treatment and the ‘ratchet clause’ would prevent states and communities from taking measures to ensure regional growth, social equality of opportunity and quality management.
The ratchet clause prohibits privatised areas from being re-nationalised. For example, now that France has partially privatised student housing, if it ever wished to reverse the decision, it would be in store for millions of euros worth of compensation claims.
Universities would also be subject to the equal treatment principle. During the tendering process, they would no longer be able to give preference to contractors from their own region or to suppliers who pay the minimum wage. This would affect construction projects, cleaning companies, cafeterias, digital service providers and much more.
Many universities also have contracts with Google cloud services or use Microsoft operating systems. Indeed, it is estimated that European universities spend €20 billion (US$22 billion) to €30 billion (US$33 billion) a year on education technology.
American tech firms in particular are pushing for ‘free data flow’ and universities’ efforts to limit the appropriation, analysis and exploitation of personal and research-relevant data would be significantly frustrated through international treaties like TTIP.
It also shouldn’t be forgotten that schools and universities in Europe currently enjoy exceptions from copyright law for educational purposes. In Germany, for instance, 10% or a maximum of 20 pages of printed copyrighted material can be replicated for teaching.
David Robinson, special adviser to Education International, fears that this tradition of copyright exemptions for education may be at risk from international trade agreements.
“What’s new in these agreements,” says Robinson, “is intellectual property rights. In CETA and TTIP you see a narrowing of the education exception when it comes to copyright rules, which will impose more costs on the education sector.”
Broader copyright exception
Meanwhile, due to the increasing digitisation of learning, the European University Association has expressly stated its desire for not only the protection but the broadening of the educational copyright exception. Recent publishers’ lawsuits against teaching organisations who make their content digitally available show how contentious this issue already is in Europe without any US involvement.
Education Iinternational considers the “linkage between education services and e-commerce, which is becoming increasingly important with the developments around e-learning and electronic education materials”, to be dangerous.
American universities and corporations are leading when it comes to online courses, the industry for massive open online courses or MOOCs is growing globally by around 40% a year, market research company M&M estimates. In such a billion-dollar industry, who wouldn’t unhesitatingly hound every university into bankruptcy with an investor protection lawsuit?
Large American education corporations, such as the Apollo Group, whose alleged predatory practices the Barack Obama administration tried and failed to put a stop to, could operate in Europe and insist on the equal treatment principle as well, demanding the same subsidies as local public universities.
This is endemic in the US where poor quality for-profit universities receive a quarter of state funds for education while only a tenth of American students attend such institutions. Portfolio manager Steve Eisman estimates that just 9% of these private universities’ revenue is put back into education and sometimes more than half of students drop out every year.
Profit-oriented businesses
To secure quality in the recognition and accreditation of degrees and institutions is a core component of a university’s role in society.
The danger is that even if public education is excluded from the free trade negotiations, in a deregulated public sector, university administrations would be forced to act more and more like profit-oriented businesses, treating students as customers and foreign students as cash cows for tuition fees, speculating on properties or entering the stock exchange.
This is not merely dystopian speculation: the University of Perugia, Italy, in partnership with the UniCredit Bank is already offering credit cards to students and has installed ATMs around campus; through property speculation, the University of Amsterdam has racked up debts of almost half a billion euros and since 2015 the Free University of Brussels has been the first market-listed university in Europe.
Together with teaching, university research is coming under fire. The vice-president for research at the Beuth University of Applied Sciences in Berlin, Sebastian von Klinski, warns that research cooperation and contract research are already controversial under EU law, be it the clarification of copyright laws, liability or the general exploitation of patents.
The inclusion of American research would compound the issue: “That can definitely get more complicated and also more cost intensive, if the focus there has to be expanded.”
All of these problems would be caused in the first place or intensified by the free trade agreements. As has been illustrated, it is clearly nowhere near sufficient that universities are only demanding education be excluded in the treaties. Unless TTIP, CETA and TiSA are abandoned altogether, in a liberalised public sector, education will find itself struggling to keep its head above water as the tide of the market rises.
