Trade agreements? Nothing to do with state education? Think again

Janet Downs's picture
The global education market is worth trillions. And it’s viewed as a very lucrative sector particularly in the USA.

That why there’s US pressure to include education in the Transatlantic Trade and Investment Partnership (TTIP) currently being negotiated between the European Union and the United States.

It’s not just the USA pushing for education to be included. The last Government’s international education strategy policy said it would negotiate with the EU to ensure ‘trade in education services can be treated as a priority’ in trade agreement negotiations. This would allow the UK to ‘take advantage of global opportunities in the education services sector’ and remove ‘market access barriers which our education services suppliers face in some third country markets.’

But it’s not just ‘third country markets’ which could be targeted. TTIP could potentially lead to for-profit schools in English state education. There are other dangers:

1When a service is locked-in to trade agreements, it remains locked-in. No future opt-out.

2‘Market access’ rules would ban trade agreement signatories from adopting limitations on for-profit organisations wanting to provide publicly-funded services like education.

3These rules could limit the ability of signatories to regulate how private and for-profit schools operate.

4Attempts by countries to impose new quality assurance requirements on providers could be interpreted as a hidden trade barrier.

5The Investor-State Dispute Settlement (ISDS) mechanism would allow companies to sue governments for alleged infringements of the trade rules which they claim affect their profits.

The negative effects on state education and other public services could be avoided if they were excluded from TTIP by negotiating a ‘carve-out’. But even if it were, state education in England could still be included. ‘Public education’ is not clearly defined. In England there’s a blurred line between public and private education: private schools are involved in state provision through sponsored academies; the trustees of one free school, IES Breckland, have outsourced its operation to the for-profit Internationella Engelska Skolan (IES).

It could be argued, therefore, there’s a precedent for non-publicly-funded schools and for-profit providers being involved in state education in England. This would make it difficult for a government to say English state education was protected by the carve-out. That’s supposing, of course, our new Government should wish to do so.

Before the 2010 election, Michael Gove said he would allow groups like Serco to run schools. When IES was given the contract to run Breckland, the Telegraph congratulated Gove on introducing for-profit schools by stealth. Since then, IES Breckland has been judged Inadequate. But the contract with IES hasn’t been cancelled; neither has IES Breckland been given to another sponsor or closed as other Inadequate free schools have been. A cynic might say IES Breckland continues to be run by IES so the Government can claim for-profit provision is already allowed in England via outsourcing.

It is essential that public education is defined as education which is funded, wholly or partly, by taxation. The ‘wholly or partly’ description is important to avoid a loophole whereby schools which raise funds through charitable giving or from commercial enterprises (such as hiring out school premises) could find themselves outside any carve-out.

Opposition to TTIP has mainly focused on threats to the NHS and the environment. The House of Commons Environmental Audit Committee said in March that the alleged boost to transatlantic trade offered by TTIP ‘must not be at the expense of throwing away hard-won environmental and public-health protections’. We should be equally concerned about threats to state education.
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Guest's picture
Sat, 30/05/2015 - 16:33

Make no mistake the ISDS component has the potential to impact on every aspect of our economy. There are several international examples, e.g.:

1. Veolia a French waste disposal company is suing the Egyptian government for millions in compensation because the latter increased the minimum wage

2. Canadian company that sued Costa Rica

3. Another Canadian company sued El Salvador

The New Internationalist refers to the ISDS element of TTIP as an affront to democracy

This vile and wholly iniquitous piece of legislation permits multinational corporations to over ride a sovereign states legislation and take them to secret courts to obtain millions and millions in compensation. Effectively, any nation signing up for ISDS is handing over its sovereignty to the big corporations.

Time is now short in terms of trying to stop this trade obscenity. The European parliament has a key vote coming up in the next few days and it behoves all right minded people to lobby their MEP now.

John Mountford's picture
Sat, 30/05/2015 - 21:06

Janet, in my view, it is a national imperative that TTIP and the attendant ISDS (Investor-State Dispute Settlement) is stopped in its tracks. 38 Degrees has been especially interested in educating ordinary people about the downside of this resolution process to flag up threats to the NHS. What you have exposed here is that health will not be the only public service with the potential to be affected by this international trade deal. Thank you for this.

On the other side of the Atlantic, there is as much resistance to TTIP, which has its mirror in a Trans-Pacific Partnership (TPP). The views of Senator Elizabeth Warren of Massachusetts, were clearly expressed in a recent interview for the Washington Post and posted on International Economic Law and Policy Blog.

"You can’t envision even in theory a way to structure ISDS that would assuage your concerns?

WARREN: Once a group of independent arbiters, whose decisions cannot be appealed, can issue a money judgment of any size, then the ISDS problem arises….Here’s what you could do. If corporations had to go through the same procedures that anyone else has to go through to get the trade deal enforced, then the problem wouldn’t exist.

Now, if a labor union says, ‘Vietnam promised not to work people for a couple of dollars a day, and to raise working conditions, and then failed to do it,” they have to get the U.S. government, through the trade rules, to go to Vietnam and prosecute the case. If corporations had to do the same thing, then it would be a level playing field…ISDS gives a special break to giant corporations, a break that nobody else gets."

There are questions of global significance here, not least, who are these 'independent arbiters'? Who appoints them? What powers do they have?

We know from the existing situation that their primary task is to arbitrate over whether a company can successfully sue a sovereign state over action it has taken that affects the commercial interests of the company (profit). It determines whether the company is entitled to obtain adequate redress for unforeseen government policy changes. Now, how open to interpretation is that? Aren't most government policies the result of unforeseen changes or new developments over time?

This article in the International Business Times helps us undewrstand more about ISDS.

In essence, "ISDS grants a foreign investor the right to initiate dispute settlement proceedings against a foreign government. It is commonly included in free trade agreements, but opponents say it could leave local level policymakers vulnerable to libel proceedings from overseas investors, should local laws interfere with their ability to turn a profit."

The risk of this deal being adopted affects far more than the NHS and the environment. As you point out, it is potentially unassailable.

"1 When a service is locked-in to trade agreements, it remains locked-in. No future opt-out."

The fact that there is no escape from the deal actually indicates, to any impartial observer, that it is flawed from the outset. The only safeguards are those that protect the long-term interests of multinational corporations. We need to ask those negotiating this deal what happens to our sovereignty both now and in the future.

Janet Downs's picture
Sun, 31/05/2015 - 07:23

Guest and John - thanks for your detailed comments. It's essential people realise what's happening - it seems we're sleepwalking into a situation where global corporations, backed by their billions, could challenge decisions made by democratically-elected governments. Even the Environment Audit Committee was concerned TTIP would erase measures that protect the environment and public health.

It appears, however, that many MEPs and MPs (last Parliament) aren't listening. Michael Gove, now our Justice Secretary, said worries about TTIP were 'scaremongering'.

mistemina's picture
Mon, 01/06/2015 - 10:22

Janet, thank you for this timely article.
We must be vigilant that 'for-profit' education is not internationalised.

I believe I am a A Cynic that thinks the Government can claim for-profit provision is already allowed in England via outsourcing.

John Mountford's picture
Tue, 02/06/2015 - 22:15

I do believe we are in danger of sleep-walking into a future none of us is prepared for, and few of us want. The slender (undemocratic) majority of this government is insufficient for Ms Morgan and her supporters to press ahead with the reforms outlined in their manifesto and announced in the Queen's speech.

The potential for big business to influence and control what ought to be properly funded and locally managed and accountable public services is clearly not confined to England. I came across the following article posted on the Education in Crisis website
entitled, “Just” $6 a month?: The World Bank will not end poverty by promoting fee-charging, for-profit schools in Kenya and Uganda"

If any of us have not yet realised how all-pervasive the influence of the for-profit education lobby is, this long, but powerful piece is a stark reminder. The threat is global and, as a careful reading of this article shows, its influence is felt most on the poorest and least able to afford the financial implications of those corporations intent on making a killing on the backs of ordinary people.

Janet Downs's picture
Wed, 03/06/2015 - 07:37

John - the promotion of 'affordable' schooling in the developing world undermines the ability of states to provide universal, free education for all (or it lets them off the hook and allows them to avoid their responsibility to provide such education). It is not equitable. Poor families can usually afford to educate just one child. That's usually the eldest boy. Such policies force poor families to choose between food, medicine and education.

Education is a public, as well as a private, good - it should not be available only via fee-paying, for-profit 'affordable' schools.

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