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Bank Branch Manager Anzsco Abs – 2 Inquiries about the work of this staff member: Media and Publications Productivity Commission Locked Bag 2 Collins St East Melbourne VIC 8003 Tel: (03) Fax: (03) [email protected] General Inquiries: Tel: ( 03) or (02) The quote, with permission from the author(s), should read: Nguyen-Hong, D. and Wells, R. 2003, Restrictions on Trade in Education Services: Some Basic Indexes , Productivity Commission Staff Working Paper, Canberra , October. Information about the Productivity Commission, its publications and current work program can be found on the World Wide Web at or by calling Media and Publications at (03)

3 Introduction This paper examines the restrictions on trade in services to the growth of trade in the service sector in economies. The paper is part of the Commission’s research on barriers to trade in services. Early literature compared trade barriers in aviation, telecommunications and electronics (Doove et al. 2001), banking (McGuire and Schuele 2000), maritime services (McGuire, Schuele and Smith 2000 ), businesses (Nguyen -Hong 2000) and delivery services. Kalirajan 2000). This paper was prepared by Duc Nguyen-Hong and Robert Wells. Tom Nankivell, Paul Gretton and Philippa Dee of the Productivity Commission contributed to the paper. The authors also thank Robert Stevens, William Thorn and Bettina Cooke of the Department of Education, Science and Training, and Lisa Filipetto of the Department of Land and Trade for their comments and help in collecting the know. DISCLAIMER III

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4 Findings Abbreviations iii vii Summary ix 1 Introduction 1 2 Table of Contents Educational and Service Sectors of Trade Service Constraints Process Index 9 3 Results of the Census Imports to foreign countries Exports to foreign countries Exports to foreign countries Arrival of natural persons Summary 29 A Detailed results 31 Notes 39 CONTENTS V

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5 Figures 2.1 Restricted categories for domestic and international directory. for the arrival of natural persons in the division 28 Table 2.1 Index of services, eating in other countries. index for consumption in other regions by sub-regions 31 A.2 Index for consumption in other countries by sub-regions 32 A.3 Index for consumption in other regions by small units 33 A.4 Index of foreign consumption by small units. 34 A.5 A reference for foreign countries for the provision of land borders by the division 35 A.6 An index for foreign countries for the provision of land borders by the division 36 A.7 A reference for foreign countries for the arrival of natives by division 37 VI THE EDUCATION DEPARTMENTS.

6 Abbreviations APEC GATE GATS OECD WTO Asia-Pacific Economic Cooperation Global Alliance for Transnational Education General Agreement on Trade in Services Organization for Economic Co-operation and Development World Trade Organization MGA DAIGTAS VII

7 1 Introduction Education is widely recognized as important for social and economic well-being. At the individual level, students stand to reap significant benefits, both financial and non-financial, from. At the national level, it adds to the country’s human capital and can increase economic growth. It can play an important role in the transfer of cultural values ​​and the development of social capital. And people see it as a necessity for justice, or a wide range of services, at least. Education is often included in the government. For example, all developed and developing countries mandate that all children reach the minimum age: in Australia it is 15 years. Schools and universities are often built by the public sector and/or attract public subsidies. Students may receive loans, financial aid or concessions for related services such as accommodation and public transport. While most services worldwide are provided by local government agencies to local students, trade in services is an important and growing activity. In recent years, the participation of foreign students has become an important part of the sector in some industries. Other types of trade in services are growing or may grow strongly. The most common way is to establish remote campuses and study centers that provide services directly to foreign students in their own business. In addition, the development of new technology and electronic commerce has made it easier to send long distances between borders. Although statistics are not accurate, the value of world trade in services was estimated at about US $50 billion per year in 1996 (APEC 2001). APEC (2001) estimated that the global market for study abroad in secondary, tertiary and vocational education would exceed $50 billion in Larsen, Martin and with Morris (2002) estimated that the food export market for OECD countries alone is $30 billion in Statistics. in other trades it is not available. DISCLAIMER 1

8 Today, most of the trade in services is about height. However, providers are expanding into new opportunities to provide services abroad, including offering language training programs and post-secondary and vocational training programs. Australia is among the top five exporters of services in the world. About 12 percent of the total volume of its services was exported, twice the amount of the previous years. Overseas students make up 8 per cent of Australia’s top numbers, and Australian businesses are also operating outside of Asia Pacific economies. Currently, many governments restrict trade in services. Restrictions apply to different types of supply, limit competition or affect the scope, quality, price and cost of the supply of services. Some types of service restrictions are common types of trade barriers that operate in other service sectors; Others vary by category. From the point of view of some governments, restrictions on services are seen to achieve quality assurance objectives, consumer protection, and social, cultural and/or other economic objectives. yes. However, international organizations such as APEC (2001), while recognizing the importance of these considerations, have also pointed to the potential benefits of greater trade to increase income and type of service. At one level, the demand for services in real estate is growing strongly, but the ability of housing providers to meet this demand may be limited. In addition, high levels of trade can provide access to human capital and skills, knowledge and technology, and low-cost services. In addition, some trade restrictions may hinder the achievement of important social or economic goals. As part of the World Trade Organization (WTO) negotiations on the General Agreement on Trade in Services (GATS), several WTO members are looking for ways to raise greater gains from trade. services. A major focus now is on some market boundaries for business services. In the latest round (Uruguay) of trade negotiations, Australia has committed itself to open trade standards on a range of secondary and higher education services, and to make regional concessions on other services. It is currently a participant in the WTO’s GATS negotiations and has asked other WTO members to consider matching its commitments to Uruguay on trade services (DFAT 2003). 2 RECOMMENDATION WORKS

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9 As well as the regulations negotiated in the WTO or other international organizations, each company has the option to make unilateral regulations to reap domestic benefits that can bring competition. . When assessing the effectiveness of current trade barriers in services, important questions must be considered: how high are the barriers in different industries? What are the effects of these barriers on trade, costs, quality and prices charged for services? Where governments have established economic, social or cultural goals, do the constraints help or hinder their progress? where they help, are they the least expensive ways to achieve the goals? Today, those assessments are hampered by, among other things, the lack of statistical analysis of trade barriers. Identifying and quantifying limitations is critical to evaluating the benefits and costs of restrictions. The Productivity Commission and others have conducted several studies to measure trade barriers in service sectors, including banking, telecommunications, business services and distribution services. These studies have developed a method to identify and evaluate restrictions, and, if possible, estimate the effects of restrictions on economic activity. In the case of services, little work has been done to date to assess the nature and extent of trade barriers. This shows how little knowledge there is of restrictions on economic activity. However, the Australian Government’s Department of Education, Science and Training has recently commissioned a study to gather detailed information on the limitations of services in various economic sectors. The Department provides training, led by IDP Education Australia, to the Commission on the use of this program. Drawing heavily on prevention data prepared by IDP Education Australia, the current study developed

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