Globalization and liberalization of higher education services under world trade law a study on WTO GATS and free trade agreements in the context of international trade in higher education services

Title Page GLOBALIZATION AND LIBERALIZATION OF HIGHER EDUCATION SERVICES UNDER WORLD TRADE LAW: A STUDY ON WTO-GATS AND FREE TRADE AGREEMENTS IN THE CONTEXT OF INTERNATIONAL TRADE IN HIGHER EDUCATION SERVICES SANTOSH KUMAR MADUGULA B.Com (Hons.), Indian Institute of Management and Commerce, Osmania University LL.B, Government Law College, University of Mumbai Advocate, Bombay High Court A THESIS SUBMITTED FOR THE DEGREE OF MASTER OF LAWS SUPERVISORS ASSOCIATE PROFESSOR NEO SWEE SUAN, DORA ASSOCIATE PROFESSOR LIM CHIN LENG FACULTY OF LAW NATIONAL UNIVERSITY OF SINGAPORE 2006 i CONTENTS Title Page i Dedication vi Acknowledgements vii Abbreviations x Summary xii Chapter - Introduction Chapter - Regulation of Trade in International Services under General Agreement of Trade in Services: An Introduction to the Concepts of Market Access, National Treatment and Most Favoured Nation 12 2.1 Introduction 12 2.2 Market Access 18 2.2.1 Meaning And Provisions Relating To Market Access 18 2.2.2 Explanation Of Market Access 19 2.2.3 Examples Of Market Access 20 2.2.3.1 Horizontal Commitments And Market Access 21 2.2.3.2 Sector Specific Commitments And Market Access 22 2.2.4 Conclusion on Market Access 25 2.3 National Treatment 26 2.3.1 Meaning And Provisions Relating To National Treatment 26 2.3.2 Explanation Of National Treatment 27 2.3.3 Examples Of National Treatment 29 2.3.4 Commitments And National Treatment 31 2.3.4.1 Horizontal Commitments And National Treatment 32 2.3.4.2 Sector Specific Commitments And National Treatment 34 2.3.5 Conclusion on National Treatment 36 2.4 Most-Favoured-Nation 37 2.4.1 Meaning And Provision Of Most Favoured Nation 37 2.4.2 Explanation Of MFN Clause 39 2.4.3 MFN Obligation And Related GATS Obligations 41 2.4.4 MFN Exemptions 44 2.5 Conclusion on MFN 53 Chapter - GATS Commitments in Higher Education Services by WTO Member Countries 55 3.1 Introduction 55 3.2 Commitments To Higher Education Services 56 3.2.1 Albania 59 3.2.2 Armenia 60 3.2.3 Australia 61 3.2.4 China 63 3.2.5 Congo RP (Democratic Republic Of Congo Or DROC) 66 3.2.6 Costa Rica 66 3.2.7 Croatia 68 3.2.8 Czech Republic 70 3.2.9 Estonia 71 ii 3.2.10 European Community (EC) 12 73 3.2.11 Georgia 77 3.2.12 Hungary 79 3.2.13 Jamaica 80 3.2.14 Japan 81 3.2.15 Kyrgyz Republic 82 3.2.16 Latvia 84 3.2.17 Lesotho 86 3.2.18 Liechtenstein 87 3.2.19 Lithuania 88 3.2.20 FYR Macedonia 89 3.2.21 Mexico 91 3.2.22 Moldova 92 3.2.23 New Zealand 94 3.2.24 Norway 95 3.2.25 Oman 98 3.2.26 Panama 99 3.2.27 Poland 100 3.2.28 Sierra Leone 101 3.2.29 Slovak Republic 102 3.2.30 Slovenia 104 3.2.31 Switzerland 105 3.2.32 Chinese Taipei 107 3.2.33 Trinidad And Tobago 108 3.2.34 Turkey 109 3.3 Liberalization Models 110 3.4 Concluding Remarks 116 Chapter - Liberalization under Free Trade Agreements 118 4.1 Introduction 118 4.1.1 Free Trade Agreements under World Trade Law 122 4.2 Free Trade Agreements and Liberalization of Higher Education Services 125 4.2.1 Negative List Model 126 4.2.1.1 NAFTA 127 4.2.1.2 USSFTA 131 4.2.1.3 SAFTA 136 4.2.2 Positive List Approach 144 4.2.2.1 CECA 145 4.3 Comparative Commitments under the Positive and Negative List Approaches 149 4.4 Singapore Higher Education Services 155 4.5 Conclusion 158 Chapter –Globalization and Liberalization under GATS 161 5.1 Introduction 161 5.2 Mobility Of Knowledge Across Borders And The Barriers To Trade In Education Services 162 5.3 Globalization Of Higher Education 169 5.3.1 Globalization of Knowledge and Role of Universities 173 iii 5.3.2 Framing Of Education Policies And The Politics Of Knowledge Dissemination And Knowledge Production 176 5.4 Liberalization Of Higher Education Services Under GATS 180 5.4.1 Trends and Issues related to the Liberalization of Higher Education Services under the Four Modes of Supply 183 5.4.1.1 Cross Border Supply 183 5.4.1.2 Consumption Abroad 187 5.4.1.3 Commercial Presence 200 5.4.1.4 Presence of natural persons 213 5.5 Drafting Of National Commitments For The Higher Education Services Under WTO –GATS 216 5.6 Opening Up Of Higher Education Services By India 222 5.6.1 Higher Education In India 222 5.6.2 Opening Up of Higher Education Services 226 5.6.3 Implications On Import Of Higher Education Services 234 5.6.4 Implications on Export of Higher Education Services 237 5.6.5 Liberalization of Higher Education Services and Human Resource Development 242 5.7 Conclusion 246 Appendices 250 Bibliography 273 Table 1: Illustrative Schedule of Specific Commitments 17 Table The United States –List of Article II (MFN) Exemption 46 Table 3: Examples of MFN Exemptions Listed by Members 48 Table 4: Members with MFN Exemptions (by sector) 50 Table 5: Distribution of MFN Exemptions (by Sector and Conditions) 52 Table –Index of Countries with Specific Commitments for Educational Services 58 Table 7: Index of Commitments by Countries that follow ‘Model A’Liberalization 112 Table 8: Index of Commitments by Countries that follow ‘Model B’Liberalization 113 Table 9: Index of Commitments by Countries that follow ‘Model C’Liberalization 114 Table10: Singapore’s Higher Education Services Commitments under Trade Agreements 150 Table 11: United States’Higher Education Services Commitments under Trade Agreements 150 Table 12: Australia’s Higher Education Services Commitments under Trade Agreements 151 Table 13: India’s Higher Education Services Commitments under Trade Agreements 151 Table 14: Barriers to trade by Mode of Supply 166 Table 15: Number of Students Abroad –Selected Countries 190 Table 16: Students Abroad as Percentage of Home Enrolment 191 Table 17: Top Ten Source Countries 192 Table 18: Top Twenty Host Countries - Number of Students Hosted 193 Table 19: Students Hosted as Percentage of Total Enrolment –Selected Countries 194 Table 20: Top Ten Host Countries 195 Table 21: Top Ten Source Countries of Foreign Students for Major Host Countries 195 iv Table 22: Forecast of Global Demand for International Student Places in Higher Education 196 Table 23: Models of Regulation of Foreign Education Providers 204 Table 24: Selective list of Branch Campuses 210 Table 25: GATS Commitments for Higher Education Services in India (Proposal/ Recommendation) 233 Appendix –Index Of Country Commitments For Higher Education Services (Chapter 3) 250 Appendix Comparative List of Commitments under FTAs and GATS (Chapter 4) 251 Appendix AICTE Notification –Regulations for Entry and Operation of Foreign Universities /Institutions Imparting Technical Education in India (Chapter 5) 261 Appendix Questionnaire: Trade in Education Services under GATS (Survey conducted by NIEPA for Indian Ministry of Human Resource Development) (Chapter 5) 269 v GOD Dedication To All people who communicate their difficulties with, and solutions for economic poverty, illiteracy, unemployment and all forms of unjust discrimination All academicians, researchers, other professionals and social entrepreneurs, who with their genuine interest, ideas and knowledge are working for the eradication of economic poverty, illiteracy, unemployment and all forms of unjust discrimination My father, who after losing his parents at an early age, bravely faced and overcame the resulting odds during his childhood and teenage years, to have his own career in journalism for 39 years His journalism contributes to social justice and political awareness My mother, who retired from teaching after 31 years of great service She exemplifies love and care for everyone around her National University of Singapore, which with its teaching and non-teaching staff truly unleashes minds and transforms lives of thousands of individuals every academic year vi Acknowledgements Education is indispensable pre-requisite for, and component of employment and enterprise in most fields Research is the most intense knowledge activity Encouragement and support of research by organizations and individuals worldwide, plays a crucial role in development Research into education and education policies is vital for macro level human resource development I would like to thank certain organizations and individuals I am grateful for their support and encouragement It helped me before and during this research thesis involving international higher education services and trade First, I thank the National University of Singapore and its Faculty of Law for accepting my research proposal and granting this scholarship In a speech given during the inaugural of NUS Centennial celebrations, Prof Shih Choon Fong, President of NUS observed that ‘no mountain is too high and no journey too tough’, and that everyone should have the ‘courage to make dreams a reality’ I thank Vice Provost (Education) Prof Lily Kong who shared her views with me on globalization of higher education by NUS I am glad and proud to have been part of NUS, which is one of the world’s leading universities and encourages everyone to dream high The learning and opportunities to contribute that I have got as a Research Scholar here has been beyond my dreams Apart from the internship attachment at the Higher Education Division of UNESCO at its headquarters in Paris, I wrote and presented papers related to my thesis at conferences in Norway, Australia, US, and Turkey, with one of them being published in international law journal Thanks to my supervisors, Associate Professor Neo Swee Suan, Dora and Associate Professor Lim Chin Leng for their guidance and encouragement My previous Supervisor A/P Lim Chin Leng, who before leaving for Harvard, gave me invaluable guidance and the right direction for the thesis He advised me on finalizing the research scope, getting my basics right and supervised my initial writings My supervisor A/P Dora Neo whom I cannot thank enough for the faith she reposed in my work Her exceptional guidance, belief and motivation have been most crucial for accomplishing this thesis She has taken keen interest in my thesis and in final stages provided close supervision With the kind of time she has spent and sincere effort made by her on giving valuable and certain detailed comments on drafts of chapters, I must say I was fortunate to have such a considerate academician as my Supervisor I am deeply grateful to her I thank erstwhile Vice Dean, Professor Teo Keang Sood, as well as Associate Professors Ramraj Victor V, Lee Tye Beng, Joel, and the current Vice Dean, Research and Graduate Studies Tan Khee Jin, Alan for extending me with all the possible support during my candidature Thanks to my mother Sharada, who instilled in me the values of service to fellow humans To my father Sathyanarayana, who always encourages me to be a professional and never to lose confidence in whatever I undertake Thanks to my girlfriend Jessica, for her love, understanding and support Thanks to my brothers Srikanth and Shashikanth, for their advice and encouragement My academic endeavours also found motivation from my brothers’academic and professional achievements vii Thanks to the whole of administration staff of the Faculty of Law Particularly, special thanks are due to Ms Chuan Chin Yee, Ms Normah Bte Mahamood, Zanariah Zainal Abidin M and Mr Mohamad Razali Bin Sak Yok for their efficient administrative assistance Thanks to CJ Koh Law Library staff led by managers Ms Loh Mee Lan and Mrs Thavamani Ratnasamy for always extending their helpful assistance I also thank all the staff at Central Library and Office of Student Affairs I thank following persons for sharing their valuable views and information International Association of Universities’President Mr Ghoolam Mohamedbhai and Secretary-General Ms Eva Egron-Polak Singapore Economic Development Board’s Director Mr Kenneth Tan, and his colleagues in Education Services cluster Mr Jonathan Lim and Mr Huang Zhong Wen Singapore Ministry of Education’s officers Ms Saravenan Tanapal and Mr Marcus Ngiow Mr Sudhanshu Bhushan of National Institute of Educational Planning and Administration (New Delhi), Prof B Vijay Kumar of All India Federation of University & College Teachers’Organization, Mr T K Bhaumik of Confederation of Indian Industries, CPI-M’s Mr Sitaram Yechuri, Dr Krishna Gupta of India’s Ministry of Commerce and Industry, Ms Kumud Bansal of India’s Ministry of Human Resource Development and Director of Indian Institute of Management (Bangalore) Prof Prakash Apte Education Director of OECD Mr Bernard Hugonnier, Founding Editor of Journal of Higher Education in Africa Prof Dr Damtew Teferra, University of Kassel’s Prof Ulrich Teichler, Observatory on Borderless Higher Education’s (London) Ms Svava Bjarnason (Director), Ms Line Verbik and Ms Lisa Jokivirta I would also like to thank Mr Nitish Jain and Prof A Christopher of India’s SP Jain Institute of Management which recently set up its branch campus in Singapore I thank all my colleagues at UNESCO’s Higher Education Division for providing me with the opportunity to learn and contribute, particularly its Director Mr Georges M Haddad, Ms Asa Olsson, Ms Anna Lundh and Mr Min-Chul Shim In relation to conferences, I would like to thank HERDSA’s (Australia) Ms Jennifer Ungaro and Mr Roger Landbeck, ICHE’s President Prof Dog ramac and Secretary General Prof Phillis Erdogan, University of Bergen’s Prof Tor Halvorsen and Prof Atle Nyhagen, APRU, and NUS’s International Relations Office Post presentation discussions and interactions with academicians at conferences proved very useful for improving upon my research ideas Special thanks to Justice A P Shah of Bombay High Court for his words of appreciation and encouragement during annual day function for my article on higher education when I was in Law School in Mumbai Thanks to all the teachers, lecturers, professors and heads of academic institutions where I have studied, for educating me, particularly the following people To the Late Mr and Mrs Edwards, the Australian couple who established and operated the Golden Rose Primary School in Hyderabad They took personal interest in the learning development of their students Mrs Srivatsa who taught me Telugu language at Vidyodaya High School Mrs G.V Suryakumari, the lecturer who taught me Civics at Nagarjuna Junior College Prof Parimala Rao, the Principal of Government Law College, Mumbai I also thank Asst Prof Hsiao Rueylin of NUS Business School who taught me Knowledge viii Management and provided me an opportunity to undertake live project study on Education Broadcasting System, with fieldwork visit to South Korea I thank all my colleagues and employers at my previous places of work I thank all my research and coursework colleagues at NUS and Graduate Students Society, who hail from Singapore and different parts of the world for the memorable social company and cultural exposure I also thank all my friends and relatives for always being there for me My thanks go to each and everyone whose names have not been mentioned here but have directly and indirectly extended their support and encouragement In advance, I would also like to thank publishers, readers, promoters, reviewers and critics of this thesis ix Abbreviations ACE –American Council on Education AICTE –All India Council for Technical Education AIU –Association of Indian Universities APEC –Asia Pacific Economic Cooperation ASEAN –Association of South-East Asian Nations AUCC –Association of Universities and Colleges in Canada AVCC –Australian Vice Chancellors Committee BITS –Birla Institute of Technology and Science CECA –Comprehensive Economic Cooperation Agreement (India - Singapore) CERI –Centre for Educational Research and Innovation CHEA –Council for Higher Education Accreditation CII –Confederation of Indian Industry CONESUP –National Council of University Higher Education EC 12 –European Community 12 EDB –Economic Development Board EU –European Union EUA –European University Association FDI –Foreign Direct Investment FEP –Foreign Education Provider FTA –Free Trade Agreement GATS –General Agreement on Trade in Services GATT –General Agreement on Tariffs and Trade GDP –Gross Domestic Product HDI –Human Development Index HE –Higher Education HES –Higher Education Services HRD –Human Resource Development ICT –Information and Communication Technologies IDP –International Development Program (Australia) IIM –Indian Institute of Management INSEAD –Institut Europeen d´Administration des Affaires IPR –International Property Rights MA –Market Access MAHE –Manipal Academy of Higher Education MFN –Most-Favoured Nation MHRD –Ministry of Human Resource Development MoE –Ministry of Education MRAs –Mutual Recognition Agreements NAAC- National Assessment and Accreditation Council NAFTA –North American Free Trade Agreement NIEPA –National Institute of Educational Planning and Administration (New Delhi) NIIT –National Institute of Information Technologies NT –National Treatment x Campion, Mick., and David Freeman 1998 Globalization and Distance Education Mega-Institutions Mega Ambivalence In Universities and Globalization 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