Opening up educational services

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: It is now an article of faith that without forward movement in reduction of agricultural subsidies by the developed countries, World Trade Organisation (WTO) negotiations are not going to move beyond Cancun. This issue was reiterated in the recent meetings in Geneva.

Contrary to popular feeling, however, recent US and EU actions against China on the issue of textile and clothing imports do not yet endanger WTO negotiations because of the special discriminatory treatment of China incorporated in the terms of its accession to the WTO. In fact, if India is unable to cash in now on the China restrictions for the next few years it never will.

However, in the discussion on agriculture and the phased out Multi Fibre Agreement (MFA) on textiles, one loses sight of another agreement where countries have been missing their submission deadlines again and again—the General Agreement on Trade in Services (GATS). This is probably due to the fact that the GATS agreement works on a positive list approach: each country is free to offer a limited range of services for negotiations.

Since services can be added periodically to a country’s offer list as and when a country deems fit, even the most conservative approach is feasible. This is in contrast to the Gatt approach—where restrictions can only be placed on a small set of well defined negative list of commodities which is itself subject to pruning in later negotiations. As is now well known, the binding nature of the ‘single undertaking’ clause makes issues like agriculture and the MFA seem like life and death issues.

Having missed the March deadline for submissions under GATS, countries will have to make their submissions now by the end of May. One area in which India, too, will make submissions is educational services which includes higher education. While it is still not clear (at the time of writing) what the India offer is likely to be, it is important to understand how the post- WTO scenario preparedness differs in the case of services compared with submissions under Gatt. I will look at this issue specifically from the point of view of trade in educational services.