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Policy Brief

ASEAN Liberalization of Trade in Educational Services: Challenges for Thailand No. 1, January 2014 *By Patcharawalai Wongboonsin EXECUTIVE SUMMARY The liberalization of educational services in Thailand and across the member countries of ASEAN exists within a bi-level environmental context: 1) the multilateral level defined by the World Trade Organization’s General Agreement on Trade in Services (GATS), and 2) the ASEAN regional level, specifically the ASEAN Framework Agreement on Services (AFAS), the latter intended to promote cooperation in services among the member countries of ASEAN based on the principles of the WTO’s GATS Plus. When compared to its ASEAN counterparts, Thailand is relatively committed to educational liberalization. This reflects in the Thai commitment up to the 8th package of commitments under the AFAS covering all levels and various categories of education services, surpassing most ASEAN countries with regard to these two factors. This is especially at the secondary and tertiary levels, where the Thai commitment embraces all categories.

INTRODUCTION This policy brief addresses liberalization of educational services in Thailand and across the member countries of ASEAN, which is part of a research project on personnel development and productivity in preparation for ASEAN liberalization submitted to the Office of Permanent Secretary, Ministry of Education this year. CONTEX AND IMPORTANCE OF PROBLEM Services, according to Article I3(b) of the World Trade Organization (WTO)’s General Agreement on Trade in Services (GATS), includes “any service in any sector except services supplied in the exercise of governmental authority”, where the latter “means any service which is supplied neither on a commercial basis, nor in competition with one or more service suppliers”.

The CPC system classifies education services as part of community, social and personal services and lists pre-primary education services as a separate sixth category in Version 2. Furthermore, the CPC (Version 2) system separates Higher education services into post-secondary non-tertiary education services and tertiary education services. Adult education services on the other hand are included in the CPC category Other education and training services and educational support services. (WTO, 1998) The GATS distinguishes four modes of supply, cross-border trade (mode 1), consumption abroad (mode 2), commercial presence (mode 3) and presence of natural persons (mode 4) as shown in Figure 1.

Education services in the WTO’s Services Sectoral Classification (SSC) list comprise Primary education services (which include Pre-primary education services), Secondary education services, Higher education services, Adult education and Other education services. (WTO, 1991) These subsectors are aggregates of the more detailed categories of the United Nation’s Central Product Classification (CPC) system.

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Policy Brief

ASEAN Liberalization of Trade in Educational Services : Challenges for Thailand

Figure 1 Modes of Services Under GATS Mode 1 (denoted M1 in Figure 1): Cross Border Supply Examples: distance education from a sending country to a receiving country; educational software and other materials if they are traded across borders from a sending country to a receiving country Mode 2 (denoted M2 in Figure 1): Consumption Abroad Example: students from a sending country who travel to a receiving country and enroll in an educational program. Mode 3 (denoted M3 in Figure 1): Commercial Presence Example: universities from a sending country setting up campuses or language institutions establishing schools in a receiving country. Mode 4 (denoted M4 in Figure 1): Movement of Natural Persons Example: lecturers, teachers or researchers from a sending country providing educational services in a receiving country.

Over the past years, trade in education services has increasingly gained importance, especially at the tertiary level, as evidenced in the increasing number of students going abroad for study. Data on international trade in education services, however, are scarce and only available for mode 2 at the higher education level. In the year 2009 there were 3,369,242 internationally mobile students at the tertiary level, compared to around 1,500,000 tertiary level students studying abroad in the early 1990s. (WTO, 1998) The region with the highest number of tertiary level inbound students was North America and Western Europe. The United States of America (USA) have remained the leading exporter of mode 2 education services at the tertiary level, followed by the United Kingdom (UK) and Australia. Among the ASEAN countries, Malaysia was the top exporting country, receiving 41,310 inbound tertiary level students in 2009, followed by Singapore (40,401 inbound students in 2009) and Thailand (16,361 inbound students in 2009). Main export markets of North American and Western European Countries are countries in East Asia and the Pacific.

Countries in East Asia and the Pacific accounted for 43 percent of tertiary level mode 2 exports of the USA, 25 percent of the UK and 60 percent of Australia. In line with the Australian data, the most important export markets for ASEAN countries are countries in East Asia and the Pacific. Based on the data on international flows of mobile students at the tertiary level in 2007 (UNESCO Institute for Statistics (2009)), the top three sending countries in ASEAN are Malaysia (46,473 outbound students), Indonesia (29,580 outbound students) and Vietnam (27,865 outbound students). Top destinations for students at the tertiary level in ASEAN are Malaysia (24,404 students in 2006) and Thailand (10,915 students in 2008).

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Policy Brief

ASEAN Liberalization of Trade in Educational Services : Challenges for Thailand

POINTS OF CONCERN: COMMITMENTS TO LIBERALIZATION OF TRADE IN EDUCATIONAL SERVICES Research on the liberalization of educational services in Thailand and other ASEAN member countries has found that educational services are part of trade in services in the context of international trade, two levels of which have been observed: multilateral and regional (ASEAN). In the multilateral context, services are implemented under the World Trade Organization (WTO)’s General Agreement on Trade in Services (GATS). Research has also found that educational services rank among the lowest of all facets of the service sector in terms of commitment given by WTO members to trade in services. Of 153 WTO member economies, only 51 including Thailand, Cambodia and Vietnam from ASEAN, have made a commitment to liberalize educational services. At the regional level, free trade in services, partially an effort to bring together ASEAN members and boost economic cooperation specifically in terms of services, under the ASEAN framework agreement on services (AFAS), in fact, seeks to broaden and deepen commitments to greater liberalization of services than have already been initiated under the principles stipulated in the WTO’s General Agreement on Trade in Services (GATS Plus). Based on the WTO framework ASEAN negotiations over the liberalization of services also adhere to the principles of Most Favored Nation (MFN), transparency the setting of national regulations, and progressive liberalization. These negotiations have led to the development of Market Access and National Treatment principles for four modes of trade in services: Cross Border Supply (Mode 1), Consumption Abroad (Mode 2), Commercial Presence (Mode 3), and Movement of Natural Persons (Mode 4).

ASEAN members’ educational liberalization, when compared to that of their WTO counterparts, is found to have similar characteristics. That is, liberalization is greater in Modes 1 and 2 than in Modes 3 and 4. Whereas several restrictions on Mode 3 are imposed by many countries, Mode 4 barely exists. Educational liberalization appears to adhere to ASEAN’s layout for liberalization in services. Moreover, when compared to its ASEAN counterparts, not only is Thailand committed to educational liberalization at all levels and in various categories, but it also surpasses most ASEAN countries with regard to these two factors, especially at the secondary and tertiary levels, where our commitment embraces all categories.

KEY POINTS ASEAN states have, so far, broaden and deepen commitments to greater liberalization of services than have already been initiated under the principles stipulated in the WTO’s General Agreement on Trade in Services (GATS Plus). When compared to its ASEAN counterparts, Thailand is relatively committed to educational liberalization. This reflects in the Thai commitment up to the 8th package of commitments under the AFAS covering all levels and various categories of education services, surpassing most ASEAN countries with regard to these two factors. This is especially at the secondary and tertiary levels, where the Thai commitment embraces all categories.

http://www.asean.chula.ac.th/ • @ChulaASEAN


Policy Brief

ASEAN Liberalization of Trade in Educational Services : Challenges for Thailand

POLICY RECOMMENDATION The study sees the need for Thailand to be more pro-active in its preparation for liberalization of educational services, pursuing an agenda to prepare its people for participation in the ASEAN Community through educational management at all levels, and by raising educational standards so that the country can become an educational hub. Towards this, a key position is for educational administrators at all levels to educate the general public for participation in the ASEAN Community and to raise educational quality so that Thailand can serve as an educational hub, especially for Cambodia, Laos, Myanmar, and Vietnam. Thailand should also expand access to quality education to everyone on a fair and equitable basis and work to ensure that the country’s education conforms to regional and international standards. In order for Thailand to be competitive, this will require a commitment to human resource development focusing on professional skills, language skills, life skills, ICT (information and communication technology) skills, math and science skills as well as an ability to be creative, innovative thinkers.

REFERENCES ASEAN. (1995). ASEAN Framework Agreement on Services. Jakarta: ASEAN Secretariat

WTO. (2010). Education Services: Background Note by the Secretariat, 1 April 2010. http://www.aseansec.org/

ASEAN. (2009). Annex to the Protocol to Implement the Seventh Package of Commitments under ASEAN Framework Agreement on Services. Jakarta: ASEAN Secretariat.

WTO (1998) Education services - Background note by the Secretariat. Online at www.wto.org/english/tratop_e/serv.../w49.doc, accessed on November 1, 2011.

ASEAN. (2010). Annex to the Protocol to Implement the Eighth Package of Commitments under ASEAN Framework Agreement on Services. Jakarta: ASEAN Secretariat.

WTO (1991) Services sectoral classification list - Note by the Secretariat. Online at www.wto.org/english/.../mtn_gns_w_120_e.doc, accessed on November 1, 2011.

OECD (2011) Education at a glance - Indicator B2: What proportion of national wealth is spent on education?Online at www.oecd.org/ dataoecd/61/17/48630884.pdf, accessed on November 1, 2011. “TERTIARY EDUCATION / ISCED 5 and 6 / Internationally mobile students by host country and region of origin/ 2009” available online at http://www.uis.unesco.org/ Education/Pages/tertiary-education.aspx, accessed on November 4, 2011. Wongboonsin, Patcharawalai et al. (2012). Personnel Development and Productivity in Preparation for ASEAN liberalization. Research Report submitted to the Office of Permanent Secretary, Ministry of Education. Bangkok: Chula Unisearch, Chulalongkorn University. (in Thai)

*Patcharawalai Wongboonsin, Ph.D, is Professor of Demography at the College of Population Studies (CPS) and Deputy Executive Director at ASEAN Studies Center, Chulalongkorn University, This article first appeared in January 2014.

Contact: Patcharawalai Wongboonsin at patcharawalai.w@chula.ac.th

Published by ASEAN Studies Center, Chulalongkorn University, January 2014. ASEAN Studies Center Chulalongkorn University Location: 3rd Floor, Vidyabhathna Building, Chulalongkorn University, Phayathai Road, Pathumwan, Bangkok 10330 Tel.+66 2 218 3929, +66 2 218 3933 Fax. +66 2 218 3928 Email: aseanstudiescu@gmail.com

http://www.asean.chula.ac.th/ • @ChulaASEAN

Policy Brief No. 1  

ASEAN Studies Center Chulalongkorn University Policy Brief No.1

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