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Transatlantic Trade and Investment Partnership (TTIP): Education is not for sale

published 2 July 2014 updated 2 July 2014
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Writing about trade agreements carries with it the risk of inducing readers into a semi-comatose state. That’s mainly because trade deals are written in obscure legalese wrapped in horribly technical and mind-numbing prose. Who, after all, can really get excited about “bound tariff rates”, “transparency rules”, or “sanitary and phytosanitary measures”? No amount of caffeine would keep a sane person awake.

But we do need to wake up.

Trade deals are becoming increasingly important for all of us, including teachers and education workers. Education is increasingly seen by the global education industry and some governments as a commodity that can be “traded” like widgets or wheat, and that should be governed by the commercial rules of trade treaties.

The latest incarnation of this logic, if I can call it that, is the Transatlantic Trade and Investment Project, or TTIP. The TTIP is an ambitious and comprehensive trade, investment and regulatory cooperation agreement being negotiated between the European Union (EU) and the United States (US).

The first thing to know about the TTIP is that it’s extremely broad in scope. Not long ago, trade talks were largely quantitative bargaining exercises. One country would offer to cut its tariffs by 10%, while another would counter with 8%. No more. Trade deals like the TTIP extend far beyond tariffs and quotas to cover any legislation, measure, rule, regulation, or requirement that potentially affect trade. It’s not just about numbers; it’s really about public policy.

Education remains one of the least-covered sectors in trade agreements because of legitimate concerns that legally-binding trade rules would restrict the ability of authorities to ensure access to quality education. In the context of the rise of cross-border education, marketisation and commercialisation, however, some private education companies are looking to open new markets and set binding rules in trade deals that would lock-in the privatisation education.

For instance, the UK government indicated in its international education strategy policy released last year that “[i]n order to ensure the UK is best placed to take advantage of global opportunities in the education services sector, the Government will look actively at how significant trade negotiations, both ongoing and future, could address the market access barriers which our education services suppliers face in some third country markets.”

What market access barriers, you might ask? There are no tariffs on trade in education of which I’m aware. Rather, what are being targeted are regulatory barriers – things such as accreditation procedures, quality assurance, local hiring requirements and procurement policies for education institutions. In other words, all the things we do to ensure quality, equity, accessibility, and other educational policy goals.

So far, the EU has said that there’s nothing to worry about, that public education will be protected. However, both the EU and US are discussing the inclusion of “private” education services in TTIP, including adult education. This was confirmed by the recent leak of the EU initial offer in the TTIP that included a commitment to open up all sectors of education to private providers.

Consequently, the TTIP could facilitate a flood of private, for-profit American colleges into Europe and leave governments with limited policy space to regulate them. And regulation of the private sector is needed. In 2012, the US Congress launched an investigation into the activities of the for-profit colleges and found there was a 64% drop out rate and high graduate unemployment rates. As well, for-profit colleges spent over 22% of all their revenues on marketing, took just under 20% in profits, but devoted just 17% of their revenues to instruction. The Congressional report concluded that for-profits were characterised by "substandard academic offerings, high tuition and executive compensation, low student retention rates and the issuance of credentials of questionable value."

What makes matters even worse is a proposal to include a so-called “investor-state-dispute settlement mechanism” in the TTIP. Most trade agreements, like those of the WTO, involve state-to-state dispute resolutions. If a country feels that another signatory country is in violation of an agreement, it can launch a legal process that is settled by the WTO.

“Investor-state” is different because it grants private companies special rights to bypass domestic courts.  Cases are heard by arbitration panels that can order governments to compensate investors allegedly harmed by public policies or regulations. In effect, investor-state rules establish a private justice system exclusively for foreign investors, including the world’s largest and most powerful multinational corporations.

In other words, corporations are given a powerful tool to challenge public policies. There are numerous examples of the dangers of this. For instance, at the end of 2012, Dutch insurer Achmea (formerly Eureko) was awarded €22 million in compensation from Slovakia under the investor rights provisions of a bilateral investment treaty signed with the Netherlands. Achmea challenged a 2006 Slovak government decision reversing the health privatisation policies of the previous administration and requiring health insurers to operate on a not-for-profit basis.

It’s not hard to imagine a similar case where, if education services are covered by the scope of the TTIP, offshore private education providers could argue that accreditation rules or quality assurance procedures are in fact trade barriers.

Education unions in the European Union and in the United States have recently joined together in opposing the TTIP and defending quality education. The message is clear: commercial trade rules must never compromise the policy space we need to equitably provide people with quality public services, including education.

The opinions expressed in this blog are those of the author and do not necessarily reflect any official policies or positions of Education International.