No.16, winter 2002/2003
By Glenn Rikowski
In F. Scott Fitzgerald's classic American novel, The
Great Gatsby, the pivotal figure, Jay Gatsby is
elusive, hard to pin down. Through Gatsby, Fitzgerald
plays off the relation between illusion and reality.
Gatsby organises parties and sometimes doesn't turn up
for them. He is distanced from his own creations and
effects.
The World Trade Organisation's (WTO) General Agreement
on Trade in Services (GATS) of 1994 seems to have a
similar kind of existence. It appears to be a shadowy
force, with massive potential to disrupt, undermine
and transfigure public services - yet distanced from
their privatisation. The GATS' substantive impact is
in some doubt, as many governments - especially here
in the UK - seem hell bent on nurturing the business
take-over of public services, GATS or no.
A common way to approach the relationship between the
GATS and public services is to do an "impact"
assessment, as the Association of University Teachers
has undertaken for UK higher education, and as some
Canadian GATS critics have done for Canadian schools.
Whilst having tremendous value, such impact
assessments are partially speculative - developing
scenarios regarding what might or could happen through
the application of GATS imperatives and disciplines.
But this is only half the picture, and the relation
between GATS and public services ideally needs to be
approached on the basis that it is a two-way thing,
and that government policies affect differentially the
nature of the relation for each service, and for each
country. This article explores the relation between
schools and the GATS in England today, but first a few
words on the GATS.
The GATS seeks to open up 160 services sectors to
international capital. Specifically, it aims to create
a 'level playing field' thereby avoiding
discrimination against foreign corporations entering
services markets. The process of trade liberalisation
in services (including currently public ones) is
progressive; it will be deepened and strengthened over
time, and Part IV of the GATS Agreement makes this
clear. In this scenario, 'public' services will
progressively be turned into internationally tradable
commodities. UK Government claims that public services
are exempt from the GATS have no firm foundation.
International trade law lecturer Markus Krajewski has
analysed the GATS Agreement in detail. He concluded
that the Agreement makes it impossible to tell whether
public services are included under GATS. This makes
the GATS fiendishly difficult to combat on the basis
of what is actually written down in the Agreement. On
the one hand, if it was clear that public services
were included under the GATS then governments,
corporations and pro-GATS lobbyists could give no
assurances that the 'GATS has nothing to do with
privatisation', as they do currently. Their
reassurances to concerned organisations and their
patronising arguments that anti-GATS folk are merely
scare mongering would not be taken seriously, as they
sometimes are today. On the other hand, if it were
clear that public services were excluded from GATS
provisions then two things would be obvious. First,
anti-GATS activists and trade unions could defend
public services from the GATS monster on the basis of
international trade law, and corporations attempting
to argue that public services were incorporated within
the GATS would clearly be on a loser. Anti-GATS forces
could confront corporations that attempted to use the
GATS to further their interests in public services by
using the actual Agreement against them. Secondly, it
would be clear that New Labour is really keen on the
business take-over of public services, and is not
being forced or cajoled into it by trade rules framed
by some distant, business-friendly institution such as
the WTO.
Meanwhile, the opacity of the GATS is cunning indeed.
It has the potential to intellectually disarm GATS
critics. Anti-GATS activists have no firm footing for
critiquing the Agreement.
The current round of GATS negotiations at the WTO
headquarters in Geneva started up in February 2000;
almost directly after the WTO Ministerial Meeting in
Seattle late-1999 broke up in disarray following the
anti-WTO protests there. An overall deal has to be
brokered for December 2004, to come into force in
2005. So for anti-GATS activists, trade unions and
defenders of public services there is some urgency.
A good starting point for exploring the relation
between schools and the GATS is the GATS Agreement
itself, together with the Schedule of Commitments for
education in relation to the European Union (EU). The
UK's GATS commitments are incorporated within those
for the EU, though there are a few national
differences (see WTO, 1994). On information gleaned
from the EU GATS Infopoint, it appears education has
already been lost to the GATS. For primary education,
20 countries committed themselves to GATS disciplines
in 1994, and for secondary education 22 countries took
the plunge. The EU is GATS-committed for both primary
and secondary education.
The GATS incorporates four modes of service supply.
Mode 1 is "cross-border" supply, the 'supply of a
service from the territory of one Member to a consumer
in the territory of another' (EU GATS-Infopoint, p.1).
Mode 2 supply is concerned with "consumption abroad",
where 'the consumer of the service travels to the
service supplier' (ibid.). Mode 3, "commercial
presence" is 'where the service suppliers establishes
in the foreign market as a legal entity in the form of
a subsidiary or a branch' (ibid.). For all of these
modes of supply, the EU's commitments for primary and
secondary education are "none" - which is the opposite
of what it sounds. "None" means that a country is
committing itself to ensuring that there are 'no
restrictions which are inconsistent with GATS rules
covering participation in the market by foreign
service suppliers' (EU GATS-Infopoint, p.2). In
relation to UK/EU GATS commitments on primary and
secondary education, there are two aspects to this.
Firstly, for the UK, there are no barriers regarding
'Limitations on Market Access' (though a few EU
countries have some limitations on market access
incorporated into the EU Schedule for either primary
or secondary education). Thus, UK primary and
secondary education 'markets' appear to be open to
foreign suppliers. WTO members committing themselves
to opening up primary and secondary education through
GATS (as we have), must show any limitations on access
for foreign suppliers - and then these can be
challenged through the WTO Disputes Panel by the
corporations' national governments, if they are WTO
members. Only national governments that are WTO
Members can participate in the complex WTO Dispute
Settlement Process (Rikowski, 2001, p.11).
Corporations would have to lobby and persuade national
governments to go through with this if there was any
reluctance amongst trade ministers and officials to
pursue the case.
Furthermore, as we have signed up to the GATS
regarding primary and secondary education, then those
services are also subject to the "Limitations on
National Treatment" provision. Under this GATS rule,
member states must acknowledge any limitations in the
treatment of foreign suppliers that puts them in a
less favourable position than their domestic
counterparts. For example, Edison Schools (from the
States) must be alerted to any differences in the ways
they are being treated as compared with UK education
services suppliers if they enter the UK schools
market. Failure to provide the necessary information
might result in the foreign supplier seeking
recompense through the GATS via their national
governments taking the case through the WTO Dispute
Settlement Process. Transparency is the issue here.
The UK has no limitations on the National Treatment
provision in the EU Schedule either. Finally, only in
Mode 4 supply, the "presence of natural persons" from
another country does some limitation regarding foreign
primary and secondary education suppliers possibly
apply. Mode 4 supply is "Unbound" for EU primary and
secondary education. "Unbound" means a country is
making no commitment either to open up its market or
to keep it as open as it was at the time of accession
into the WTO. Practically, what this means for Mode 4
supply is that if Edison Schools wanted to set up
operations in the UK, then the company would probably
have to use UK employees, as general immigration rules
would still apply. It is likely that teachers from the
US couldn't be just flown in to work in Edison UK
schools regardless. However, the nature of the
"unbound" status on Mode 4 supply muddies the picture,
with no clear barrier to US teachers being jetted into
Edison UK schools established on the basis of the EU
GATS Schedule.
From the above account, it might appear that the UK
(via the EU) has a pretty much 'open door' policy
regarding the foreign supply of primary and secondary
education services. It seems that education activists
and trade unionists are eight years too late on GATS
rules for education services that are technically
irreversible. Yet this is a misleading impression,
which is exposed as such on deeper examination of the
WTO's Schedule of Commitments for education services
under GATS (WTO, 1994). Section 5 of the EU's Schedule
of Commitments indicates that in relation to
education, the GATS refers to "privately funded
education services". From this, it might seem that the
only education services in relation to schools under
threat from the GATS are independent and private
schools. Why should we get too agitated if only Eton,
Harrow and Roedean and their ilk are under threat from
GATS rules? They are clearly in the 'education
market', so must take the consequences and face
competing foreign providers.
However, once again, the GATS language is cleverly
crafted. The Schedule does not pinpoint private
education 'institutions', but privately funded
education 'services'. It is not the case that a whole
education institution has to be a for-profit outfit
for the GATS to apply. Any of its constituent services
- from frontline ones such as teaching, to cleaning,
school meals services and the school library - could
fall under the GATS if private capital is involved.
Furthermore, private sector operators in school
improvement, equal opportunities and recruitment and
other schools' services, previously supplied by the
local education authority (LEA) also fall under the
GATS.
It could be argued this misses the point: are not
these services still 'publicly funded' even though
education businesses like Nord Anglia and school meals
providers like Initial Services are delivering the
service? It could be argued they are not basically
'privately funded' education services. A number of
points are relevant here.
First, this argument assumes that 'public' money
remains 'public' even when transferred to a private
sector service deliverer ruled by profit-generation.
However, it could be argued that once the contract is
signed to deliver frontline teaching, school
management or school improvement services the 'public
money' undergoes transformation into private capital.
This is the magic of money, the illusion on which New
Labour and GATS protagonists' arguments rest. At a
meeting in a church hall in Newham following the Trade
Justice Movement lobby of Parliament earlier this
year, Stephen Timms, former Schools Minister (now at
the DTI), argued the private sector was being brought
in to improve standards, and that this was not
privatisation as the pertinent services were still
being publicly funded. This argument is na�ve at
least, and positively misleading.
Secondly, for some New Labour schools policies,
private finance forms an element of start-up capital.
In the City Academies (or just Academies now, under
the Education Act 2002), for specialist schools and
for some education action zones, private capital forms
part of the start-up fund. The foundational
significance of private capital is even clearer in the
case of schools built under the Private Finance
Initiative (PFI), where money to build the school is
raised at commercial rates in the money markets by
private companies. In all these cases, it would seem
that the involvement of the private sector opens up
schools to the GATS. These are private education
services that have virused public money.
Thirdly, under the Education Act 2002 school governing
bodies can set themselves up as companies. They then
have the power to invest in other companies.
Furthermore, school companies can merge to form
"federations" - chains like McDonalds - to gain
economies of scale, thereby increasing profit-making
capacity. Schools can enter into deals with private
sector outfits. The Act gives the Secretary of State
new powers to form companies for involvement in any
area of school or LEA life. It provides a
de-regulatory framework for the business takeover of
schools, and hence also for the virusing of GATS
throughout our school system. Of course, New Labour
can still argue that all this is 'publicly funded',
but the previously public finance is transfigured into
private capital in the process. Through these
mechanisms, schools are exposed to the GATS.
Fourthly, directly after the General Election victory
in 2001, Stephen Timms and Sports Minister Richard
Caborn promoted a series of 'partnerships' between
private and state schools. Thirty-four
Independent/State School Partnerships were established
on 3rd July 2001. Dissolution of the barriers and
distinction between public finance and private capital
muddy the issue of whether schools services are either
state financed or 'privately funded'. The insurgence
of private schools into the state sector could well be
dragging the GATS in its wake.
Finally, as Belgian teacher and education activist
Nico Hirtt (2000, p.14) has indicated, only education
systems financed solely by the state and with total
exclusion of any commercial operations are excluded
from the GATS. This point underscores the previous
four: the greater the business involvement in state
schools, the more they are opened up to GATS and a
future as internationally tradable commodities. On
this account, policies and mechanisms that nurture the
business takeover of schools can be viewed as the
national faces of the GATS (for more on this see
Rikowski, 2002). These are the national, local and
school-level GATS enablers that facilitate the
business takeover of schools. In Britain, they include
PFI, outsourcing and information and computer
technology deals. Ofsted is transfigured into a
GATS-facilitator every time it locates a 'weak' school
ripe for business takeover.
Rather than a Geneva-based GATS monster forcing the UK
government to embrace GATS, every time the private
sector enters, deepens and expands its involvement in
our schools it opens those "educational services" to
the GATS. The fight against the business take-over of
schools is simultaneously the struggle against GATS
and our education services being catapulted into
international education markets. New Labour's
education policy is virusing the GATS into our schools
and LEAs. One day, a company in Detroit or Vancouver
that focuses primarily on the bottom-line could
control your local secondary school. Now, that would
certainly stretch the notion of a 'community school'
and the concept of democratic accountability.
References
EU GATS-Infopoint (undated) Opening World Markets for
Services: Legal Texts and Commitments, accessed 5th
May 2002, at:
http://gats-info.eu.int/gats-info/gatscomm.pl?MENU=hhh
Hirtt, Nico (2000) The 'Millennium Round' and the
Liberalisation of the Education Market, Education
and Social Justice, spring, vol.2 no.2: 12-18.
Rikowski, Glenn (2001) The Battle in Seattle: Its
significance for education, London: Tufnell Press.
Rikowski, Glenn (2002) Globalisation and Education, a
paper prepared for the House of Lords Select Committee
on Economic Affairs, Inquiry into the Global Economy,
22nd January, ATTAC Britain, at:
http://www.attac.org.uk
WTO (1994) European Communities and their Member
States - Schedule of Specific Commitments, World Trade
Organization, GATS/SC/31, 15th April, at:
http://docsonline.wto.org
Glenn Rikowski teaches in the School of Education,
University College Northampton. His latest
publication, co-edited with Dave Hill, Peter McLaren
and Mike Cole, is Marxism Against Postmodernism in
Educational Theory (2002, Lexington Books). A shorter
version of this article appeared in the November 2002
issue of Red Pepper.
Contact:
rikowski@tiscali.co.uk
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