RESTRICTED  WORLD TRADE  
ORGANIZATION  S/C/W/313 
1 April 2010 
 (10-1798) 
Council for Trade in Services  
  
 
EDUCATION SERVICES 
 
Background Note by the Secretariat
1 
  
1. This Note has been prepared at the request of  the Council for Trade in Services, with a view 
to stimulating discussions in the Council on educat ion services.  It provides background information 
and updates a previous Note on trade in educati on services (S/C/W/49, dated 23 September 1998), of 
which many of the observations made therein remain  pertinent.  This Note focuses on developments 
and issues considered to be most relevant to the GA TS.  It is not intended to provide a comprehensive 
account of the sector.    
I. INTRODUCTION 
2. The education sector's importance is well recognized.  Education plays a crucial role in 
fostering personal and social development, as well as economic growth.  Government policies play a 
dominant role in this sector.  Over time, trade in e ducation services, particularly at the tertiary level, 
has been growing in importance.  Driving factor s include a combination of demographic changes, 
technological developments, nationa l development goals, and govern mental reforms to the funding 
and provision of higher education.  
3. Abetting the growth in international trade in th is sector has been the expansion in the number 
and diversity of private education programmes, as well as the emergence of innovative arrangements 
between institutions across borders.  The sector, however, has remained one of the least committed 
under the GATS.  Trade barriers exist in all four modes of supply. With increased availability of 
international programmes of study, issues of accr editation, quality assuranc e and recognition have 
also assumed particular importance for both supp liers and consumers of education services.  
4. This Note is structured as follows. Part II discusses the definition of the sector in the GATS 
context and highlights some of main classificati on issues.  Parts III and IV review the economic 
importance of the sector and the changing structure of  the education market.  Parts V to  VII analyze 
recent trends in international education and the ma in factors driving growth.  The remaining Parts 
VIII and IX review GATS commitments and MFN exemptions, and include a discussion of trade 
barriers and regulatory/quality assurance issues. 
5. It should be noted that since the purpose of this  Note is to discuss trade in education services, 
its focus is on segments where international private education has been the most notable.  Its content, 
as well as Member specific references, have main ly been determined by the availability of 
information. 
                                                     
 
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. S/C/W/313 
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  II. DEFINITION OF THE SECTOR 
6. In the Services Sectoral Classification List (W/120), education services are defined by 
reference to five categories: primary education services; secondary education services; higher education services; adult education, as well as the residual category of other education services (see Table 1 and Annex 1 for a description of definitions used). 
Table 1:  Summary of the classification of Education Services according to W/120a 
5 Educational Services  
 
5.A Primary education services (921) 
 
- which comprises Preschool Education Se rvices (CPC 92110) and Other Primary 
Education Services (CPC 92190).  These cate gories do not include child-care services 
(considered as social services in CPC 93321) and services related to literary programmes 
for adults, which are part of the sub-category Adult Education Services (CPC 92400). 
5.B Secondary education services (922) 
 
- which comprises General Secondary Education Services (CPC 92210), Higher 
Secondary Education Services (CPC 92220), Technical and Vocational Secondary 
Education Services (CPC 92230), and Technical and Vocational Secondary Education 
Services for handicapped students (CPC 92240). 
5.C Higher educatio n services (923) 
 
- which comprises Post-Secondary Technical and Vocational Education Services (CPC 
92310) and Other Higher Education Services (CPC 92390).  The former refers to sub-degree technical and vocational education, while the latter refers to education leading to a 
university degree or equivalent. 
5.D Adult education services (924) 
 - which comprises education for adults outside the regular education system.   
5.E Other education services (929) 
 
- which comprises education services at the first and second levels in specific subject matters not elsewhere classified, and all other education services that are not definable by 
level. Excluding education services regard ing recreation matters, for example, those 
provided by sport and game schools, which fall under sporting and other recreation services (CPC 964). 
a W/120 refers to the Services Sectoral  Classification List as contained in  MTN.GNS/W/120.  CPC codes contained 
therein correspond to the UN Provisi onal Central Product Classification. 
7. Distinctions between the various categories ar e based mainly upon instruction at different 
levels of study from primary to hi gher education.  The two other cate gories, adult and other education, 
cover education services provided largely outside the formal education system.2  Adult education is 
somewhat unique since apart from comprising of education taken outside the regular education 
system, it is defined with reference to the recipients of the service.3  There is also an overlap with 
"other education" (CPC 929), which is a residual category that also includes education not definable 
by level.  In the category of "higher educati on", a distinction is made  between post-secondary 
education which leads to the award of a degree or its equivalent (i.e., other higher education) and 
studies which do not (i.e., vocational and technical e ducation).   The dynamic nature of the education 
sector with changes in the content of study prog rammes and qualifications has significantly affected 
                                                      
2 The current CPC definition of education services excludes 'Education services primarily concerned 
with recreational matters', which are classified in CPC 9641 (sporting services).    
3 Traditionally, adult education has tended to refer to  studies undertaken outside the formal education 
system for general or community interest.   S/C/W/313 
 Page 3 
 
 
  the delineations between the various categories, esp ecially with respect to post-secondary education 
(i.e., higher education, adult edu cation and other education).   
8. The expansion of the sector has also given rise to a range of complementary activities in areas 
such as educational testing and evaluation, and student recruitment and placement services (including those facilitating study abroad).  While testing ac tivities are designed to support educational processes 
or systems, the W/120 does not classify such activit ies under education services.  Similarly, there is 
no specific category for student recruitment and agency services, as no instruction is involved. Training activities undertaken outside formal educati on have expanded in term s of scope and number, 
and may not be fully captured by the existing W/120 categories.  In most cases, training activities, which are usually of short duration and skills-o riented (e.g. courses on information technology, 
languages and corporate training) do not lead to a formal qualification.  
9. Since its publication in 1991, the Provisional Ce ntral Product Classification (CPC Prov) has 
been revised twice, and in the second revision (CPC Rev.2), changes have been made to the 
classification of post-secondary education.   These changes sought to accomodate various issues that 
have arisen with regard to the distinction betw een degree and non-degree "higher education"; overlap 
between "adult" and "other education"; the treatment of sports instruction; and the classification of 
training and non-instructional activities (see Table 2).  
Table 2: Differences between treatment of post-second ary education services in CPC Prov and CPC Rev.2 
Provisional CPC CPC Rev. 2 
5. C Higher education services (923) 
- which comprises Post-Secondary Technical and 
Vocational Education Services (CPC 92310) and 
Other Higher Education Services (CPC 92390).  The 
former refers to sub-degr ee technical and vocational 
education, while the latter refers to education leading 
to a university degree or equivalent. 
 Two new separate categories  have been created 
 Post-Secondary non-tertia ry education services 
(924) - comprises of a general subclass (92410); 
and specialised one (92420) which leads to a 
labour-market relevant qualification.  
 Tertiary education services (925) – comprises of 
first stage tertiary (92510) leading to a university 
degree or equivalent; and second stage tertiary 
(92520) for advanced research qualifications, such 
as a doctoral degree.  
5.D Adult education services (924) 
- which comprises education for adults outside the 
regular education system.   "Adult education" has been removed.  Services 
previously classified therein have been merged into a new category on "other educat ion and training services 
and educational supp ort services" (929). 
5.E Other education services (929) 
- which comprises education services at the first and 
second levels in specific subject matters not elsewhere 
classified, and all other educ ation services that are not 
definable by level. Excluding education services regarding recreation matters, for example, those 
provided by sport and game schools, which fall under 
sporting and other recreation services (CPC 964). 
 The new category "other education and training 
services and educational support services" (929) 
expands coverage to:  
 Other education and training services (9291), 
which comprises of cultu ral education services 
(92911); sports and recreation education services 
(92912); other education and training services 
(92919). 
 Educational support services (9292) that are non-
instructional such as educational consulting, 
counselling, evaluation and testing services; and organization of student exchange programmes. 
 S/C/W/313 
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  III. ECONOMIC AND DEVELOPMENTAL IMPORTANCE 
A. 
GENERAL OBSERVATIONS  
10. Education is widely considered as a key fact or in promoting economic growth and involves 
the use of significant resources.  In APEC economies,  for instance, total spending on education is at 
least US$1,600 billion annually or 6.7 per cent of GDP.4  Economic studies have shown that the 
impact of education on growth varies according to an economy's level of development.5  Higher 
education has been shown to have an important impact on all economies, w ith primary and secondary 
education contributing the most to growth in low income economies.6  Education raises productivity, 
which leads to an overall increase in the level of output, though the exact amount by which education 
contributes to economic growth varies.7  Productivity improvements have  a long lasting impact on the 
human capital stock thus allowing  an economy to grow  at a more rapid pace than previously possible.  
An improvement in a population’s level of education also has the effect of facilitating the innovation, 
transfer and absorption of technology.8 
11. Economic benefits flow not only to the individual but also to society.9  For OECD members, 
the net public return from an investment in ter tiary education exceeds US$50,000 on average for each 
student.10  In addition to economic effects, education has been shown to bring widespread societal 
benefits such as lower crime, better governan ce, better health and interpersonal trust.11  Taking into 
account both public and private expenditure, OECD economies spent on average in 2009, 6.1 per cent 
of their collective GDP on education.12  In developing countries, pub lic expenditure on education has 
consistently been within the range of 4.5 to 5 per cent over the period from 2001 to 2008.13  However, 
there are important regional variations with public spending. In both Central Asia and in East Asia 
and the Pacific, public expenditure was reported at only 2.8 per cent of GDP.14   
12. The importance of public funding reflects the fact that primary, secondary and post-secondary 
non-tertiary education is usually perceived as a p ublic good. Education is thus one area where all 
governments intervene, to a greater or lesser extent, to fund or direct the provision of services with a view not least to ensuring equitable access, esp ecially to primary and secondary education.   
B. 
PRIVATE EXPENDITURE AND RETURNS FROM EDUCATION  
13. The share of private expenditure in education is  sizeable.  In all OECD members, for which 
comparable data is available, private funding on educational institutions re presents around 15 per cent 
of all expenditure.15  In Australia, Canada and the United  Ki ngdom, as well as in Israel, private funds 
are reported to constitute around 25 per cent of a ll educational expenditure .  The proportion exceeds 
                                                      
4 Centre for International Economics (2008), p. 8. 
5 See studies quoted by Vincent-Lancrin (2007), pp. 62-63.  
6 Ibid.  
7 The Centre for International Economics (2008), us ing Australian data found that each unit of growth 
is made up of factors relating to education (44 per cent) and factors relating to capital and productivity (56 per 
cent). Within the education factors, 14 per cent of growth is due to improvements in the quality of labour, and 
30 per cent of growth is due to the provision of technical and higher education. 
8 World Bank (2003).  
9 OECD (2009).  
10 Ibid.  
11 World Bank (2003);  and OECD (2009).  
12 OECD (2009), p. 215. 
13 UNESCO database available at http://www.ui s.unesco.org/ev.php?ID= 2867_201&ID2=DO_TOPIC. 
14 UNESCO (2007). The figures should be interpreted with caution as the average given by UNESCO 
is based on an estimate for China's expenditure in 1999. 
15 Data includes economies with OECD partner status. OECD (2009), p. 226.  S/C/W/313 
 Page 5 
 
 
  30 per cent in Japan, Korea and the United States and Chile.16  In Australia, Canada, Japan, the United 
States and Israel private funding for higher education  reaches above 40 per cent, and above 75 per 
cent in Korea and Chile.  In Australia and New Zeal and, the high proportion of private expenditure is 
reportedly accounted for by the large number of international students enrolled on university 
programmes.  
14. In more than one-half of developing countries, private spending accounts for more than 10 
 per cent of total education expend iture, with important variations.17  For instance, the share rises to 
one-third, or more, in Chile, Colombia and Indonesia.18  In general, most private spending goes 
towards private institutions, although a pr oportion is also spent on public schools.19 
15. Private returns from education are high for both developed and developing countries, which is 
why individuals have an incentive to invest in education. In developing countries, the wage 
differential between a secondary school leaver and a university graduate has been estimated at about 
200 per cent.20  The earnings premium for higher education is  also  substantial in most economies and 
reportedly exceeds 50 per cent in 17 out of 28 OECD Members and partner countries.21  Education is  
also generally a good insurance against unemploym ent, particularly in the context of economic 
downturns.22  As discussed in the next section, the grow ing size of private expenditure has important 
implications for the structure of the education ma rket and its increasingly international nature.   
IV. STRUCTURAL CHANGES IN THE EDUCATION MARKET 
16. Historically, trade in education services has been  limited since education was mostly provided 
by national governments. Schools, technical colle ges, universities and adult education centres have 
typically been owned, financed and operated as public  facilities.  Private education, especially by non-
profit providers, has always existed in parallel, but w as less extensive in terms of scope and scale.  In 
recent decades, significant change has taken place in the structure, governance and financing of  
public sector institutions, especially with respect to higher education.23  At the same time, demand for 
education has grown. In that context, private edu cation has taken a more prominent role, with growing 
numbers of for-profit institutions, as well as priv ate philanthropic institutions, in the education 
sector.24 
17. That being said, in most economies, education at the primary and secondary levels is still 
predominantly publicly provided, though there are exceptions.25  In the OECD area, for instance, on 
average 91 per cent of primary and 85 per cent of secondary school students are enrolled with public 
institutions.  Similarly high percentages can also  be observed in developing countries.  Given its 
importance for human and social development, gove rnments throughout the world tend to consider 
instruction up to a certain level – commonly primar y and secondary education - as a basic entitlement.  
It is thus normally provided free of charge, or with a nominal fee, by public authorities and, in most economies, participation is mandatory.    
                                                     
 
16 OECD (2009), p. 227. 
17 UNESCO Global Education Digest database available at 
http://www.uis.unesco.org/ev.php?ID=7628_201&ID2=DO_TOPIC 
18 Ibid. 
19 UNESCO (2007), p. 44. 
20 OECD (2009), p. 63 
21 Ibid., p. 139. 
22 Ibid, p. 120. 
23 The Task Force on Higher Education and Society (2000), p. 30. 
24 Private philanthropic institutions are not-for-profit in stitutions that rely on a combination of gifts and 
fees.   
25 For instance, in Hong Kong, Chin a 90 per cent and 93 per cent of primary and secondary education, 
respectively, is privately provided.  For further exam ples, see Centre for International Economics (2008). S/C/W/313 
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  18. The situation changes, however, with respect to higher education.  Although students enrolled 
at publicly funded institutions s till outnumber those in private institutions, over the last decade, 
private providers have made significant inroads at both the national and international level.  Today, 
private institutions globally account for some 30 per cent of all students in higher education.
26  I n  
some regions of the world, private higher education in stitutions are part of a fast growing international 
education market.  The private sector represents s lightly more than 10 per cent of total tertiary 
enrolments in Spain and France, about 30 per cent in Poland, the US and Mexico.27  I n  A s i a n  
economies, such as Japan, Korea, Indonesia and the Philippines, over 75 per cent of enrolments are 
with private education providers, while in Mexico , Brazil, South Africa and Chile it is about 50 per 
cent.28  In China, private universities accounted for about 6.6  per cent, or about 1.34 million of the 20 
million students enrolled in fo rmal higher education in 2006.29  In addition, major public universities 
in China are reported to have set up second-tier colle ges, as income-generati ng extensions, with about 
1.47 million students enrolled.30    
19. In India, private higher education accounts for more than one-third of overall enrolment in 
higher education.31  Although India, unlike China, has a l ong history of institutions entirely funded 
through private initiatives, private education by fo reign providers is a relatively recent phenomenon 
characterised by the setting up of new campuses, as well as the establishment of new programmes.   Reportedly, plans are currently underway to allo w foreign universities to set up branches, which 
would potentially further expand the number of institutions offering private education.
32  
20. Private education has also been expanding in Ce ntral and Eastern Europe, the Middle East, as 
well as in Africa.33  In many African economies, which starte d from a low initial base, the growth of 
private institutions has been rapid.  In Ethiopia, where virtually no private higher education institution 
existed a decade ago, over 60 are now in existence.34  While data is not systematically collected, it is 
reported that there are 18 such institutions in  Kenya, 20 in Tanzania, and 32 in Nigeria.35  One of the 
most remarkable developments in the continent' s higher education system is the mushrooming of 
private colleges.  However, th e demand for access is still far from being fulfilled, with a total 
enrolment of rate of about 5 per cent of eligible school leavers in higher education.36 
21. A related trend has been the increasing i nvolvement of public universities in revenue 
generating activities.37   While higher education in the OECD ar ea continues to be heavily subsidised 
for domestic students, universities are increasingly expected to generate new sources of revenue.  The generation of funds from private sources has given ri se to a new generation of government-dependent 
private institutions, as distinct from the traditional model of a fully government-dependent 
institution.
38  One consequence of this trend has been greater competition for more fee-paying 
                                                      
26 Altbach, et.al (2009), pp. xi-xiii.  
27 Vincent-Lancrin, (2009b), p. 261. 
28 Altbach, et.al (2009). 
29 See descriptions provided by Hayhoe and Lin (2000) and Yang (2009). 
30 Ibid. 
31 Agarwal (2010). 
32 Chang (2010).  
33 Altbach, et.al (2009). 
34 Teferra, (2008). 
35 Ibid. 
36 Ibid. 
37 Besides tuition fees, universities also generate income from research funds, as well as  consulting and 
research fees. 
38 For statistical purposes (see OECD, 2009) a public education institution is defined as one controlled 
and managed directly by a public education authority or agency, or is controlled and managed either by a 
government agency directly or by a governing body, most of whose members are appointed by public authority 
or elected by public franchise.  The source of funding is another distinguishing factor. The OECD defines a  S/C/W/313 
 Page 7 
 
 
  students, especially international students.  In th is respect, Australia, New Zealand, United States and 
the United Kingdom are amongst the market leaders with public universities authorised to provide 
education services at non-subsidised rates to foreign students.39    
22. In the Asia-Pacific region, where private pr ovision had been encouraged as early as the 
1990s, institutional and polic y changes have involved the restruct uring of public universities and the 
establishment of private universiti es, including by foreign providers.40  In Malaysia, for instance, 
legislation was enacted which gave rise to  a wide variety of private institutions.41  In 2006, there were 
16 private universities in Malaysia, of which five were foreign-owned branch campuses.42  T h e  
number of foreign students increased from about 14,500 in 2001 to just over 40,500 with 84 per cent 
enrolled in private institutions.43  Initiatives to expand the private education sector as part of national 
capacity building have also taken place in, for ex ample, China (including Hong Kong), Thailand and 
Singapore.44 
V. EXPANSION AND INNOVATION IN THE INTERNATIONAL PROVISION OF 
EDUCATION SERVICES 
23. An important feature of education services trade has been the increasing international 
mobility not only of students, but also of programmes and institutions.  Abetting that mobility has 
been the innovative use of information and comm unication technologies providing alternate ways to 
deliver education services.  New institutional arra ngements involving a greater and more diverse 
number of partners, ranging from e ducational institutions to corpor ations, have also created new 
commercial opportunities such as the franchising and twinning of academic programmes.    
24. Table 3 provides a description of some common and newer forms by which education 
services are being delivered, and the modes of supply that are potentially involved.  Consumption 
abroad has been the most common way by which trade in education services occurs.   In recent years, 
this has been supplemented by cross-border su pply, including franchise/twinning arrangements 
between a foreign provider and local institution, and commercial presence.  
25. In a franchise/twinning arrangement, the student  is enrolled by the foreign institution but 
completes a substantial part of the study programme at  a local institution.  In most arrangements, in 
order to complete the programme th e student has to travel abroad and undertake the final year of study 
at the foreign institution. The lo cal institution, provides the phys ical facilities and teaches the 
programme of the foreign institution, but does not confer any degrees or academic qualifications.  The 
foreign institution may ensure quality through on-site supervision and/or the di rect involvement of its 
faculty staff.  Through such franchise/twinning a rrangements a local institution can dramatically 
increase the choice of courses available to students in their country of origin.45  The student has the 
advantage of obtaining a foreign qualification at significantly reduced cost.  
                                                                                                                                                                     
government-dependent private institution as one where more than 50 per cent of funding comes from 
government sources.  While a fully independent pr ivate institution receives less than 50 per cent. 
39 OECD (2004), p. 26.  Other examples in the OECD area include universities in Austria, Belgium, 
Canada, Ireland, Netherlands and the Slovak Republic.  
40 Rudner, M (1997), pp. 88-116. 
41 Tham.and Ji (2007), pp. 6-8. 
42 Ibid. 
43 Ibid. 
44 OECD (2004), p. 29.  
45 Bashir (2007), pp. 27-34, for a description of typical franchise and twinning models. Also, OECD 
(2004), p. 120. S/C/W/313 
Page 8  
 
  Table 3: Correspondence between mode s of supply and forms of educatio n services traded internationally 
Mode Education examples/forms Main feature a 
1. Cross-border supply (mode 1) Distance education 
Online education 
Commercial franchising/twinning 
of a course Programme mobility 
2. Consumption abroad (mode 2) Students abroad People (student) mobility 
3. Commercial presence (mode 3) Establishment of an educational 
institution or satellite campuses 
Branch campus, including joint 
venture with local institutions Institution mobility 
4. Presence of natural persons 
(mode 4) Professors, lecturers, teachers, 
researchers providing education 
services abroad People (academic) mobility 
a The taxonomy of people, programme and institution mobilit y is based on work by the OECD.  See OECD (2004), 
Internationalisation and Trade in Higher Ed ucation: Opportunities and Challenges, p20. 
26. In some cases, the correspondence between forms of education delivery and modes of supply 
are relatively straightforward such as in the case of  study abroad (mode 2) and traditional distance 
learning (mode 1), or academic mobility (mode 4).  However, some of the newer arrangements often 
involve a combination of two or more modes of s upply and are difficult to categorise.  For instance, 
twinning and franchise arrangements have similarities to  a branch campus in terms of the face-to-face 
education provided, but no commercial presence (mode 3) is established by th e foreign provider. All 
physical facilities are owned, and staff recruited,  by the local institution while teaching formats, 
materials, quality control, supervision and evalua tion are provided by the foreign institution.   
Arguably, the foreign institution remains the service supplier and the course is taught at distance with 
the assistance of the local partner. This form  of programme mobility, which can sometimes be 
combined with a pure distance on-line course, tends to correspond to cross-border supply (mode 1).  
Consumption abroad (mode 2) can also be involved in such arrangements, as the student is often 
required to study abroad at the foreign instituti on to complete the programme. The movement of 
personnel (mode 4) may also be necessary fo r supervision or instruction purposes.  
27. While statistics on international trade in e ducation services are limited, various indicators 
suggest that the main trend over the past several decades has been the rapid expansion of the sector, 
especially at the tertiary level. This is demons trated by the increasing international mobility of 
students, academics and researchers, institutions and programmes.  Factors behind the growth in 
international trade in education services and the ma in trends are discussed in the following sections. 
VI. FACTORS DRIVING INTERNATIONAL TRADE IN EDUCATION SERVICES 
28. Growth in trade in education services has b een driven by a combination of demand and 
supply factors.  These include advances in in formation and communication technologies, the 
emergence of new private actors in the provision of education services, government policies towards 
improving access to post-secondary education, ne w revenue generating strategies by education 
providers, individual student choices and requirement s of employers for higher level qualifications 
and language skills.46 
                                                      
46 See OECD (2004), pp. 25-31 for a discussion of the policy rationales and drivers of cross-border 
education.   S/C/W/313 
 Page 9 
 
 
  29. On the demand side, increasing numbers of secondary school graduates seeking entry to 
tertiary level education has been a consistent trend over past decades.  The expansion has been 
particularly intense since 2000, with 51.7 million new tertiary students enrolled around the world in 
just seven years.47  In OECD economies, tertiary enrolment rose by 43 per cent between 1995 and 
2003.48   In developing countries, the expansion was even bigger.  A study by UNESCO and the OECD 
found that for a selection of 17 developing countri es from Latin America, Asia and Africa, the 
increase during the same period was 77 per cent.49  The Global Student Mobility 2025 Report foresees 
that the demand for international educa tion will increase to 7.2 million in 2025.50   For many 
economies, the demand for tertiary level edu cation far exceeds domestic capacity.    
30. Other factors that have played an important role in fuelling the demand for international 
education are the returns that accrue from further education.51  The labour market is demanding new 
and changing competencies such as adaptability, k nowledge of latest technologies, and the ability to 
acquire new skills independently.52  The number of jobs requiring high-level skills has grown faster 
than those requiring only basic skills, thus fu rther stimulating demand for higher education.53  In an 
increasingly global economy, English-language qualifica tions confer a certain competitive advantage, 
since international transactions are mainly conducted in that language.54  Study abroad also facilitates 
international migration and is sometimes supported by  host governments as part of a skilled migration 
policy.55  
31. On the supply side, due to technological developments and changes in the structure of the 
education market, a greater number and variety of  study programmes and courses are being offered 
internationally (see section V).  Technological pr ogress, for instance, has improved and facilitated 
various forms of distance education.  Due to changes in the financing of higher education, institutions 
from major education provider economies have put increased emphasis on revenue generation.56  This 
has resulted in a drive to offer education services to international students at commercial rates through 
student mobility programmes and/or by opening branch campuses and offshore programmes.  
32. Demand and supply factors have also combined  with deliberate national capacity building 
objectives, as demonstrated by some South-East Asian economies.57  Initially, while such capacity 
building approaches were based on students moving ab road for higher education, over the last decade 
the emphasis has shifted towards opening access for fo reign institutions to operate in the territory 
either through branch campuses or offshore programmes.58  The advantage of the latter strategy being 
both costs savings and the potential for rapid expansion since local students can obtain a foreign qualification without having to go abroad.  More over, since face-to-face instruction is provided 
through collaboration with a local pa rtner, it is hoped that there will  be a positive impact on the higher 
education sector in general.  
33. The growth in internationally traded educati on services poses certain challenges, particularly 
in terms of quality assurance, resource implica tions for the public funded sector and access to 
                                                     
 
47 UNESCO (2009a). 
48 Teixeira (2009), p. 239. 
49 Ibid.  
50 Böhm, et.al (2002) assumes that based on worldwide economic and demographic growth, the number 
of international students will rise at a compound rate of 5.8 per cent. 
51 Bashir (2007), p. 51. 
52 Hopper (2007), p. 109. 
53 Ibid. 
54 OECD (2004), p. 30.  
55 Ibid, p. 27. 
56 Ibid, p. 26. 
57 Vincent-Lancrin (2007), p. 49. 
58 Tham and Ji (2007); Lancrin-Vincent (2007); and McBurnie and Ziguras (2001).  S/C/W/313 
Page 10  
 
  affordable education.
59  Some of these challenges, particul arly those concerning  quality assurance 
and regulatory frameworks are discussed in Section IX.  
VII. TRADE PROFILE AND KEY TRENDS  
A. PEOPLE (STUDENT /ACADEMIC ) MOBILITY ACROSS BORDERS (MODE 2 AND MODE 4) 
1. Mode 2 
34. Between 1999 and 2007, the num ber of international students doubled from 1.75 million to 
nearly 3 million.60  In 2007, 1.2 million students from Asia we re abroad, about half of whom were 
studying in the OECD area, twice more than in 1998.61  Globally, East Asia and the Pacific accounted 
for over 33 per cent of all students abroad in 2007 (see Table 4).  Students from Central and Eastern Europe account for the second largest share of inte rnational students (13 per cent) but this figure 
mainly reflects intra-European mobility.  South and West Asia's share has also been growing rapidly 
and was third highest in the world.   
35. While Latin America and the Caribbean account fo r a smaller world share of students abroad, 
very high growth (70 per cent) was registered between 1999 and 2007.  Sub- Saharan Africa, which 
had as many as 218,000 in tertiary education ins titutions outside of their home economies in 2007, 
registered an even higher rate of increase (144 per cent).
62  This number, which represents close to 6 
per cent of those enrolled in tertiary education at home, is about three times greater than the global 
average.63  In quite a number of sub-Saharan count ries, the outbound mobility ratio (the ratio of 
students studying abroad to those enrolled in tertiary institutions at home) is as high as 1:3.64    
 
 Table 4:   Students abroad by sending region:  1999 and 2007 
  1999 
(thousands) 2007 
(thousands) % increase % share 
in 2007 
North America  60 90 50.0 3.8 
Latin America and the Caribbean 100 170 70.0 7.1 
EU 15a 100 100 0.0 4.2 
Central and Eastern Europe 190 310 63.2 12.9 
Arab States 120 190 58.3 7.9 
Central Asia 60 100 66.7 4.2 
South and West Asia 100 250 150.0 10.4 
East Asia and the Pacific 440 810 84.1 33.8 
Sub-Saharan Africa 90 220 144.4 9.2 
Not Specifiedb 60 160 166.7 6.7 
Total (excluding intra EU 15) 1,320 2,400 81.8 100.0 
Intra EU 15 Students 270 240 (11.1)   
Total with Intra EU 15 Students 1,590 2,640 66.0   
 Notes:  
a EU15 includes Austria, Belgium, Denmark, Finl and, France, Germany, Greece, Ireland, Italy, 
Luxembourg, Netherlands, Portugal, Spain, Sweden and United Kingdom. 
  b Refers to students studying abroad w ithout record of the host or sending country   
  Source :  Based on data from UIS-UNESCO (2010).  
                                                      
59 Knight (2006); Garrett (2005); Altbach and Knight (2006). 
60 Vincent-Lancrin (2009), p .65. 
61 Vincent-Lancrin (2009), p. 67.  
62 UNESCO (2009b) p. 3. 
63 Ibid.  
64 Ibid.  S/C/W/313 
 Page 11 
 
 
  36. China sends the greatest number of students abroad, amounting to almost 421,100.65  Other 
major countries of origin are: India (153,300), the Republic of Korea (105,300), Germany (77,500), Japan (54,500), France (54,000), the United States ( 50,300), Malaysia (46,500), Canada (43,900) and 
the Russian Federation (42,900).
66 These ten economies account for about 38 per cent of the world’s 
international students.67  In terms of receiving economies, North America and Western Europe still 
host the largest share of students, approximatel y 70 per cent in 2000 and 64 per cent in 2007 (Figure 
1).  The rate of increase is, however, higher for E ast-Asia and the Pacific, which has seen 110 per cent 
growth over the last decade in the numbers  of  international students hosted.  
 Figure 1:  Number of internat ionally mobile students (thousands) by region of destination, 
2000 and 2007 
Year 2007
1817514
20080
73
52
5311269
 total number 2,800 thousand
 
 
Year 2000
1285244
13160
48
25
9164
22North America and
Western Europe
East Asia and the Pacific
Central and Eastern
Europe
Arab States
Sub- Sah ar an  Af r ica
Central Asia
Latin America and theCaribbean
Sout h and West  Asia
T otal number 1.825 thousand
 
 Source :  OECD (2009), Trends in Global Higher Educati on: Tracking an Academic  Revolution, p. vii 
37. The regional shares understate the fact that th e bulk of international students has traditionally 
been concentrated in only a few locations.  Co llectively, the United States, United Kingdom and 
Australia attract about 50 per cent of all students abroad (see Figure 2).  Australia and New Zealand 
have fewer students overall, but mu ch higher proportions of interna tional students in their universities 
                                                      
65 UNESCO (2009a), p. 36. 
66 Ibid. 
67 Ibid. S/C/W/313 
Page 12  
 
  than any other economy, including the United St ates, and for these economies the income from 
international students constitute a very significant export industry.
68  While the United States and the 
United Kingdom remain the top two  destinations in  terms of numbers, other destinations have also 
experienced significant growth.  Students from As ia-Pacific are increasingly choosing to study in 
destinations within the region.69  Although starting from a low base, numbers of foreign students 
hosted by China grew by 400 per cen t between 1999 and 2008 (see Annex 3).70  Australia, already one 
of the top destinations, continued to grow  by more than 200 per cent over the same period.71 
 Figure 2:  Distribution of students abroad according to national destination, 2007 
23%
14%
13% 10%11%8%3% 2%4%
2%
5%
5%US
UK
Australia
Germany
France
China
Japan
Canada
New Zealand
Singapore
Malaysia
South Korea
 
 Source :  Based on figures provided by the Observator y on Borderless Higher Education, June 2009.  
38. Overall, the pattern of student mobility reflect s two main trends. One consists of a heavy 
concentration of students from Asia and the Pacifi c studying in North America and Western Europe, 
as well as within the region (see Annex 2 for regional  shares).  The other trend reflects intra-European 
Union student mobility where the Bologna Process of  creating a European Higher Education Area has 
facilitated regional mobility.72  Much of this intra-European m obility constitutes a special situation as 
it is driven by policies and EU sponsored progr ammes that are aimed at regional and economic 
integration.73  However, even excluding intra-EU flows,  the number of international students is 
estimated to have grown by over 80 per cent from 1999 to 2007 (see Table 4).  
39. While impressive, the growth in the number of st udents abroad has to be seen in the context 
of the rapid expansion of tertia ry education worldwide (see Figure 3).  UNESCO estimates suggest 
that the number of students in tertiary educati on grew by 53 per cent over the period 2000 to 2007.74 
                                                      
68 Ziguras and McBurnie (2007), p. 4.  
69 de Wit (2008), p. 40.  
70 Ibid. 
71 Ibid. 
72 See http://www.coe.int/T/DG4/HigherEduca tion/EHEA2010/BolognaPedestriansEN.asp  
73 According to Bashir (2007), p. 12, the European Commission, through the ERASMUS programme, 
has promoted and financed almost all student flows within the European Union (EU) and into the EU from the 
candidate countries of Central and Eastern Europe. 
74 UNESCO (2009a), p. iv.  S/C/W/313 
 Page 13 
 
 
  Figure 3:  Tertiary gross enrolment ratiosa by geographical region, 2000 and 2007  
0.010.020.030.040.050.060.070.080.0
Wor l d 
Sub-Saharan Africa
South and West
Asia
Arab States
East Asia and the
Pacific
Central Asia
Latin America and
the Caribbean
Central and Eastern
Europe
North America and
Western EuropePercent2000 2007
 
a The gross enrolment ratio in tertiary education is the total enrolment in tertiary education regardless of age, 
expressed as a percentage of the population in the five-year age group after leaving secondary school.  
Source: Generated from the UNESCO Institute for Statistics database   
40. Balance of payments (BOP) data on trade in edu cation services is often either not collected or 
reported separately.  Available BOP data on edu cation services significantly underestimates the 
international trade activity in this sector.  As fo r any other service sector, BOP data only capture a 
fraction of trade in services as defined by the four modes of supply of the GATS.  Moreover, with the 
notable exception of Australia75, most WTO Members do not collect BOP statistics which 
disaggregate education services from other items.   
41. The main statistic which is available for most  economies is on the total expenditure on goods 
and services for those travelling primarily for educ ation purposes (see Table 5).  Available figures 
generally support the trends in student mobility.  Predominant exporters of education services, as far 
as consumption abroad (mode 2) is concerned, ar e developed economies.  The top 10 exporters in 
2007 included the United States (US$15.9 billion), Australia (US$10.3 billion), United Kingdom (US$7.6 billion) and Canada (US$2.2 billion).  The av erage rate of growth in total exports from 2002 
to 2007 was 12 per cent.  Top 10 importers in cluded Korea (US$5 billion), United States (US$4.7 
billion), Germany(US$2.4 billion) and India (US$2.1 billion).  
42. While just outside the top 10, developing c ountries such as Malaysia (US$199 million) have 
emerged as  significant exporters. Developing countries are also increasingly major importers of 
education services, with India (US$2.1 billion), Mala ysia (US$1.3 billion) a nd Nigeria (US$1 billion) 
featuring among the top 10 importers for 2007.
76 There are, however, significant gaps in the data 
reported.  For instance, although not listed in Ta ble 5  as among the top 10 importers of education 
                                                      
75 Detailed statistics on trade in education services for Australia is available at 
http://www.dfat.gov.au/publications/s tats-pubs/downloads/tis-fy2009.pdf 
76 No figure was reported for China.  S/C/W/313 
Page 14  
 
  services, China (including Hong Kong, China) has by far the most student nationals in higher 
education abroad, representing 17 per cent of th e foreign students in the OECD area in 2007.
77   
Table 5: Major exporters and importers of education-relat ed travel expenditure 2007* 
(million US dollars and percentage) 
Rank Exporters Value Share  
of top 
20  Annual 
% Rank Importers Value Share 
of top 
20  Annual 
% 
1 United States 15960 38.2 9 1 Korea, Republic of 5025 21.3 11 
2 Australia 10314 24.7 32 2 United States 4760 20.2 6 
3 United 
Kingdom 7612 18.2 14 3 Germany 2400 10.2 6 
4 Canada 2263 5.4 9 4 India 2152 9.1 99 
5 Italy 1711 4.1 -4 5 France 1844 7.8 22 
6 New Zealand 1124 2.7 9 6 Malaysia 1345 5.7 22 
7 France 479 1.1 17 7 Canada 1154 4.9 5 
8 Austria 422 1.0 19 8 Nigeria 1076 4.6 927 
9 Greece 383 0.9 25 9 Italy 1000 4.2 17 
10 Czech Rep. 318 0.8 28 10 Australia 659 2.8 12 
11 Turkey 296 0.7 10 11 United Kingdom 324 1.4 15 
12 Malaysia 199 0.5 33 12 Turkey 280 1.2 20 
13 Ireland 186 0.4 9 13 Greece 267 1.1 6 
14 Hungary 147 0.4 7 14 Morocco 220 0.9 28 
15 Dominican 
Rep.  95 0.2 37 15 Czech Republic 210 0.9 136 
16 Israel 88 0.2 -10 16 Libya 193 0.8 5 
17 Costa Rica 79 0.2 15 17 Venezuela, Rep. 
Bol. 182 0.8 379 
18 Bulgaria 61 0.1 20 18 Cyprus 172 0.7 -3 
19 Korea, Rep. 
of 45 0.1 61 19 Luxembourg 140 0.6 13 
20 Slovenia 44 0.1 25 20 Pakistan 138 0.6 12 
  Above 20 41826 100.0    -  Above 20 23540 100.0    - 
* As certain Members either do not collect  or report data on this item, they may not appear in the list.  The European 
Union does not report a single EU-27 figure for this it em. The BOP definition for education-related travel 
expenditure can be found at   http://unstats.un.or g/unsd/statcom/doc10/BG-MSITS2010.pdf (paragraphs 3.113-
3.128 and 3.258). 
Source :  These figures are based on information available to the WTO Secretariat.   
 
2. Mode 4 
43. The presence of natural persons for the supply of  education services is less well documented.  
The expectation though is that global mobility of acad emic staff is increasing with greater interaction 
between institutions on joint teaching and research pr ogrammes.  It is difficult to say to what extent 
such movement is represented by mode 4 sin ce the information available is not sufficiently 
disaggregated for such distinctions to be made.  Up  to 2001, data from the United States indicates that 
foreign faculty mobility into the US was increasing at all levels, including mid-career short visits and 
longer migration.78  Since 2001, these flows have continued to grow, but at a slower rate.  In relation 
to China, it has been noted that  the number of foreign expert's working in higher education rose from 
1,255 in 1980 to 14,020 in 1999.79  Within Europe, between 1997 and 2000, academics moving under 
the Socrates programme for intra-European  mobility grew by just over 70 per cent.80  
                                                      
77 Vincent-Lancrin (2009), p. 69.  
78 Marginson and Wende, van der (2007), p. 65.   
79 Marginson and Wende, van der (2007), p. 65.   
80 Vincent-Lancrin (2006), p. 17 and Smeby and Trondal (2005), pp. 449-466.  S/C/W/313 
 Page 15 
 
 
  44. Available BOP data, which provides mode 1 and mode 4 as a combined figure 81, show US 
(US$1.2 billion) and Australia (US$304 million) to  be top suppliers, and the US (US$780 million) 
and Korea (US$157 million) as leading recipients  (s ee Annex 4).  Italy (US$195 million) and Canada 
(US$148 million) ranked third and fourth respectivel y. However, given that only very few economies 
have reported such data, these rankings  have to be treated with caution.  Also, since it is not possible 
to distinguish between mode 1 and mode 4, no inte rpretation can be made of the amount of trade  
actually accounted for by  mode 4 education service suppliers.   
B. PROGRAMME MOBILITY (INCLUDING DISTANCE LEARNING ) THROUGH CROSS -BORDER SUPPLY 
(MODE 1) 
45. One of the most important innovations in higher education has been the mobility of education 
programmes across borders either in a pure distance learning format or by way of a franchise/twinning 
arrangement with a local partner.   It is difficu lt to estimate the number of such offshore programmes 
or the number of students enrolled on them, since data  is often not systematically collected.  The few 
studies available suggest that there are as many as 2,000 such programmes operating internationally 
with about 500,000 students enrolled, mostly in Asia.82  The main providers are institutions from the 
United Kingdom, Australia and the United States.  
46. Offshore enrolments in Australian universiti es grew from around 20,000 in 1996 to over 
66,000 in 2008, representing nearly one-third of in ternational enrolments in Australian universities.83  
In 2003, a survey of Australian institutions found th at nearly 1,600 programmes were offered abroad: 
57 per cent through offshore programmes; 17 per cent through on-line learning; and 16 per cent 
through a mix of on-line learning and pa rtnerships with local institutions.84  More than 85 per cent of 
programmes by Australian institutions are reported to  be located in China (including Hong Kong, 
China), Singapore and Malaysia.85  The total number of offshore programmes operated by universities 
from the United Kingdom is not available, though it h as been reported that they are found in at least 
70 locations with a heavy concentration in  South East Asia and Eastern Europe.86  Various estimates 
suggest that up to 300,000 students ar e enrolled on British offshore programmes.87  It has also been 
estimated that there are over 200 programme s offered by US institutions worldwide.88  New Zealand 
is reported to operate 63 offshore programmes,  with an enrolment of some 2,200 students.89  
47. Students on offshore programmes are mostly fro m middle-income Asian economies.  In 2007, 
China re-approved 705 programmes and 126 instituti ons operated in partnership with a foreign 
institution.90  After 20 years of continued growth, one-thi rd of Singapore’s higher education students 
are now enrolled in offshore education programmes.91  Offshore programmes also account for a 
growing share of the tertiary education sector in ot her Asian economies, as well as in the Middle East.  
                                                      
81 BOP data provides information on education-related travel expenditure and education services which 
is shown under other personal, cultural and recreational services.  Since mode 3 is not captured in BOP data and 
education-related travel expenditure reflects mode 2, it is assumed that the education services included in other 
personal, cultural and recreational servi ces represents mode 1 and 4 flows.  
82 The estimate on the number of programmes and student is based on a survey by Bashir (2007), in  
Annex 3.   
83 Australian universities publish the most detailed in formation on offshore programmes.  See anaysis 
in McBurnie and Ziguras (2009).  
84 Hatakenaka (2004),  p. 12 
85 Quoted by Vincent-Lancrin (2009), p. 71, based on data from IDP Education Australia.  
86 Bashir (2007), p. 33.  
87 Ibid. 
88 Ibid.  
89 Ibid.  
90 Dong (2008), p. 72.   
91 McBurnie and Ziguras (2009), p. 90. S/C/W/313 
Page 16  
 
  Main providers of such programmes are the Unite d States, United Kingdom and Australia.  Other 
significant providers include Japan, Sing apore, Canada, France and Germany.  
48. It is difficult to estimate the numbers of students engaged in distance learning, though the 
expectation is that significant expansion has taken place with the setting-up of large scale "open" and 
"virtual" universities.  The CISAER (Course on th e Internet: Survey, Analysis, Evaluation and 
Recommendation) project estimated that in 2000 there were over one million courses using the 
Internet worldwide.
92  Examples include the African Virtual University which works across borders 
and language groups in over 27 countries.  The Un ited Kingdom's Open University Worldwide was 
reported in 2002 to have 30,000 students enro lled outside the UK and a further 10,000 through 
partnerships with other institutions.93  
49. Although data has been compiled from a variet y of sources and comparison is not easy, 
indications are that the number of students on on-line learning and other types of offshore programmes has been growing steadily. New info rmation and communication technologies have 
created new possibilities for distance learning with the emergence of virtual education platforms.  It 
should be noted, though, that in a survey of 19 te rtiary education institutions in 13 countries it was 
found that fully on-line programmes were still fe wer than 5 per cent of total enrolments.
94  Moreover, 
programmes are often combined with traditional f ace-to-face teaching involving partnerships with 
local institutions.   
C. INSTITUTION MOBILITY THROUGH COMMERCIAL PRESENCE (MODE 3) 
50. The establishment of international branch ca mpuses is not a new phenomenon, however, in 
recent decades the scale has expanded and there is now greater focus on revenue generation.  Since 
2006, the number of international branch campuses  in the world has increa sed by 43  per cent, 
according to a report published in 2009 by the Observatory on Borderless Higher Education (OBHE).
95  In the report, the OBHE identified 162 intern ational branch campuses in the world, most 
of which were found in Asia-Pacific and the Middle East.96  The rate of growth has been high, since 
of all existing campuses, only 35 campuses ( 22 per cent) were in operation before 1999.97 
51. Institutions from the United States continue to  account for the largest share of all existing 
international branch campuses with 78 campuses (48 per cent) (see Table 6).  The US is followed by 
Australia (which has 14 campuses, 9 per cent), the UK (13 campuses, 8 per cent), France and India (each with 11 campuses, 7 per cent).   Branch cam puses are being established not just by institutions 
from developed economies, but also by developing country institutions. A number of Asian higher 
education institutions, notably those from India, Chin a, Malaysia and Singapore have established joint 
ventures in other Asian economies as well as in Africa.
98  In 2006, only five such cases were recorded 
as compared to the 26 such campuses in 2009.   
                                                      
92 Keegan (2005), p. 23. 
93 OBHE (2002).  
94 OECD (2005), p. 2. 
95 Becker (2009), p. 1.  The OBHE  is one of the few organizations which systematically collects data 
on international branch campuses.  While, there is no universally agreed definition of an international branch 
campus, the OBHE report refers to the off-shore entity of a higher education institution operated by the 
institution or through a joint venture.   Upon successful completion of the course programme, which is fully 
undertaken at the unit abroad, students are awarded a degree from the foreign institution.  Some of the 
international branch campuses listed in the OBHE surv ey are small centres, rather than extensive campuses. 
96 Becker (2009), p. 6 
97 Ibid.  
98 Bashir (2007), p. 32.  S/C/W/313 
 Page 17 
 
 
  Table 6:   Top 10 source economies of international branch campuses, 2009 
Source Number 
United States 78 
Australia 14 
United Kingdom 13 
France 11 
India 11 
Mexico 7 
Netherlands 5 
Malaysia 4 
Canada 3 
Ireland 3 
Source : Based on a survey by the Observator y on Borderless Higher Education (2009) 
52. In terms of destinations, according to the OB HE survey, the United Arab Emirates (UAE) is 
the clear leader among host economies with 40 inte rnational branch campuses, corresponding to 25 
per cent of all international branch campuses in the world (see Table 7).   
Table 7:   Host economies for international branch campuses, 2009 
Host economy  Number 
United Arab Emirates 40 
China 15 
Singapore 12 
Qatar 9 
Canada 6 
Malaysia 5 
United Kingdom 5 
Ecuador 4 
Germany 4 
Mexico 4 
Australia 3 
Bahrain 3 
Puerto Rico 3 
Switzerland 3 
Source : Based on a survey by the Observator y on Borderless Higher Education (2009) 
 
53. China is in second position among the host econom ies, with 15 campuses (9 per cent of all 
existing campuses).  Singapore is in third place with  12 campuses (7 per cent), and Qatar in fourth 
with 9 ventures (6 per cent).  Some examples incl ude the opening of campuses in China and Malaysia 
by the University of Nottingham (United Kingdo m); in Malaysia and South Africa by Monash 
University (Australia); and Vietnam by the Roya l Melbourne Institute of  Technology (Australia).99  
Sometimes, branch campuses are the result of colla boration between more than one institution, such 
as the Indian School of Business, based in Hydera bad, which was established in association with the 
Kellogg School of Management, the Wharton School of the University of Pennsylvania and the 
London Business School.   The German University of Cairo, for instance, is operated by the 
universities of Ulm and Stuttgart.100  While not recorded in the OBHE survey, an increasing number 
of branch campuses are also being established in parts of Latin America, as well as in Eastern 
Europe.101  International providers are also present in Africa though the number of such institutions is 
not well recorded.  
                                                      
99 Vincent-Lancrin (2009), p. 72 
100 Ibid. 
101 Marginson and Wende, van der (2007), p. 41.   S/C/W/313 
Page 18  
 
  54. Another important trend has been the acquisition of private education institutions by large 
corporate groups.  In these acquisitions, universiti es and colleges are brought together under common 
ownership but each institution maintains its own nationally-accredited programmes.
102  The US Group 
of Laureate International University is reporte d in 2009 to be operating 40 campuses located across 
South and North America (Brazil, Chile, Costa Ri ca, Ecuador, Honduras, Mexico, Panama, Peru and 
the United States), Asia-Pacific (Australia, China, Malaysia) and Europe (Germany, Cyprus, Spain, 
France, Switzerland and Turkey).103  The Apollo Group, which owns the University of Phoenix has 
campuses in India, Mexico and a number of locati ons in South America, as well as in Eastern and 
Western Europe.104  The Manipal Education Group from India, which already had presence in Nepal, 
Malaysia, and Dubai, acquired the entire stake of th e American University of Antigua and entered the 
Caribbean medical education market in 2008.  It has announced plans to acquire operations in Oman, 
Indonesia, and Vietnam.105  The Manipal Group’s international ope rations contribute to more than 50 
 per cent of its revenue.106 
55. While the establishment of branch campuses h as been growing in terms of numbers and 
location, they have not expanded as quickly as franchise and twinning arra ngements in which the 
education programme is offered through a local partner without requiring a "bricks and mortar" 
investment by the foreign institution.  In general, host economies that have provided support, funding 
or infrastructure, have experienced the largest gr owth in branch campus de velopments and account for 
the highest number of (new) establishments. The se tting up of a branch campus requires heavy initial 
investment in land, infrastructure and equipment, as  well as the recruitment of staff.  In addition, 
branch campuses require a clear policy and regulat ory framework providing sufficient stability to 
encourage the provider to invest capital for lo ng term operations.  Since branch campuses are 
established on a for-profit basis, th ere is also the risk of commercial failure.  In 2009, the OBHE 
reported 11 international branch campus closures, with five within the past three years.   
56. In terms of foreign direct investment (F DI), developed economies still account for the 
majority of inward and outward flows in the e ducation sector.  In 2007, developed economies inward 
FDI stock in education was US$7.8 billion, while the outward stock was US$1.5 billion.107 For 
developing economies, the inward stock was US$874 million, while the outward stock was US$29 
million.  Thus, while international branch campus es have been expanding in developing country 
locations, FDI would suggest that mode 3 flows are largely between developed economies. A better 
indicator of mode 3 is given by foreign affilia te trade statistics (FATS). Of the top 10 source 
economies for branch campuses (see Table 6), out ward turnover was only reported by the United 
States.  This showed that sales by US-owned e ducation suppliers grew by 36 per cent from 2004 and 
                                                      
102 Based on unpublished research by Christophe r Ziguras of the Royal Melbourne Institute of 
Technology.  
103 Vincent-Lancrin (2009), p. 72.  The Laureate International group is a company listed on the 
NASDAQ stock exchange.  In 2004, universities owned by the group enrolled 155,000 students and generated 
80 per cent of their revenue outside of the US.  
104 Marginson and Wende, van der (2007), p. 41.  The Apollo Group owns the largest private university 
in the United States, the University of Phoenix, as well as the Western International University. Based on 
unpublished market research by Christopher Ziguras of  the Royal Melbourne Institute of Technology other 
examples include: Kaplan Higher Ed ucation, a subsidiary of The Washington Post Company owns: Kaplan 
University and the Concord Law School in the US; the D ublin Business School, Ireland; and the FTC Business 
School in the UK;  Tribeca Learning in Australia; and th e Singapore-based Asia Pacific Management Institute 
with operations in China (including Hong Kong), Singapore and Chinese Taipei. 
105 Information on the Manipal Group is available at http://www.manipalgroup.com. 
106 Agarwal (2010). 
107 UNCTAD (2009), p.218-219.  S/C/W/313 
 Page 19 
 
 
  2006 and is close to US$2 billion.108  The United Kingdom, for which no outward data was available, 
recorded an increase of over 200 per cent (US$1.4 billion)  in inward sales turnover over the same 
period.  Given the limited number of observations, it is difficult to draw any particular conclusions 
from the existing FATS data.  
VIII.  CURRENT COMMITMENTS UNDER THE GATS 
57. Despite their economic importance and growing share of international trade, education 
services ranks amongst the sectors with the fewest number of GATS commitments.  Fifty-one Members have taken commitments in one or more education sub-sectors.
109  Of these Members, 23 
acceded after the establishment of the WTO in 1995.   Only two Members acceding after 1995, do not 
have commitments in the education sector.110  As in the case of other sectors, due to accessions, the 
overall number and quality of commitments across all of  the five education sub-sectors has increased.  
58. In the following overview of commitments, th e level of sectoral coverage will be discussed 
separately from the level of modal coverage. In tu rn, modes 1, 2 and 3 (i.e. cross-border supply, 
consumption abroad, and commercial presence), where access is determined mainly by sector-specific 
commitments, will be addressed separately from mode 4 (presence of natural persons).  Reference to 
the Horizontal Sections will be made whenever relevant. 
59. In addition, the discussion will primarily focus on the commitments regarding market access, 
since in a majority of schedules (31 out of 51 with commitments in education) the entries for national 
treatment mirror those for market access.  In the cases where the entries for a given mode under 
market access and national treatment differ, more th an half of the Members have committed in full for 
the latter (12 schedules out of 20). Current horizonta l limitations mostly provide for limitations on 
national treatment with regard to subsidies, acqui sition of real estate, investment (in state-owned 
enterprises for example), nationality requirements for the members of boards of directors and taxation. 
A. SECTORAL COVERAGE  
60. Overall, 183 commitments in a total of 51 schedules have been taken in education services.  A 
breakdown of the commitments taken in respect of the five education sub-sectors is provided in 
Table 8.  The number of commitments between the five sub-sectors is fairly evenly distributed, with 
the exception of "other education", wh ich is committed in only 25 schedules.111  In 30 schedules, 
commitments are taken for at least four of the five sub-sectors.112  The number of commitments by 
recently acceded Members is particularly high: 17 Members are committed in at least four sub-sectors, and seven Members in all sub-sectors ( see Annex 6 for a full breakdown of commitments 
                                                     
 
108 Data reported to the WTO Secretariat.  Foreign affiliate trade statistics (FATS) describe economic 
activities of foreign owned firms in the local economy and provides an indicator mode of 3.  Outward turnover 
represents total sales by firms of the reporting country in host economies.  
109 Since the schedules of Austria,  Bulgaria, Czech Republic, Estoni a, Hungary, Latvia, Lithuania, 
Poland, Slovak Republic, Slovenia have not yet been consolidated into that of the European Union and their Member States, they have been counted independently. Cyprus, Finland, Malta, Romania, and Sweden have not 
taken any commitments on education services. 
110 Mongolia and Ecuador. 
111 "Other education" is a residual category and only five schedules give some indication as to the 
activity that has been committed. 
112 These Members are: Albania, Cape Verde, China,  Chinese Taipei, Croatia, Czech Republic, Estonia, 
EU, Georgia, Hungary, Japan, Jordan, Kyrgyz Republic, Latvia, Lesotho, Liechtenstein,  Lithuania, Mexico, 
Moldova, Norway, Oman, Poland, Saudi Arabia, Sierra Leone, Slovak Republic, Switzerland, Tonga, Turkey, 
Ukraine and Vietnam. S/C/W/313 
Page 20  
 
  taken by Members).
113  Economies in transition, which represent the largest group of recently acceded 
Members, have collectively taken the most number of commitments in education services.114 
 Table 8:  Breakdown of specific commitmen ts in education services by sub-sector  
Subsector Number of schedules with commitments  
Primary education 34 
Secondary education 41 
Higher education 42 
Adult education 41 
Other education 25 
Total number of commitments  183 
 Source : WTO Secretariat  
 
61. As a result of accessions since 1995, the sector al coverage of developing countries and 
economies in transition is wider than that of developed Members.115  Commitments taken by recently 
acceded Members are also relatively free of limitati ons.  For instance, full commitments have been 
taken in higher and adult education by half of all recently acceded Members.116    
62. It should be noted that, while Article 1:3 (b) and (c) provides a carve-out for services 
provided under governmental authority, some Members have specifically excluded publicly-provided 
or funded education services from their commitments  (see Box 1 for a discussion of the governmental 
authority carve-out).  
 
Box 1 :  Carve-out for services provided in the "exercise of governmental authority"  
GATS Article I.3 (b) states that, for the purpose of the GATS, "services" include "any service in any 
sector except services supplied in the exercise of gove rnmental authority".  Article I.3 (c), specifies 
that "a service supplied in the exercise of gove rnmental authority" means "any service, which is 
supplied neither on a commercial basis, nor in co mpetition with one or more service suppliers". 
 Education supplied in the exercise of governmental authority may thus be considered to fall outside 
the scope of the GATS, if it is supplied neither on a commercial basis nor in competition with other 
suppliers. The GATS does not however define "compe tition" or "commercial basis".  There is no 
unified model of governmental provision of educa tion services, since national traditions and education 
systems differ.  A similar situation exists for ot her service sectors which feature an important public 
service aspect, such as health services.
117  The coverage of the carve-out will thus have to be 
determined on a case-by-case basis.   
 While questions have been raised on the scope of the Article I.3 (b) and (c), it should be noted that if a 
sector is not committed, only a limited set of GATS disciplines would apply, in any case.  The  most 
important of these obligations being that of most-favoured nation (MFN) treatment.   MFN does not impinge on a government's ability to restrict market access or to impose national treatment conditions.  
In this respect, WTO Members have wide flexibility  to schedule specific commitments which restrict 
                                                      
113 China, Estonia, Jordan, Moldova, Saudi Arabia, Tonga and Ukraine.  
114 Commitments on education services are taken by 17 transition, 15 developing, nine developed and 
ten least-developed country Members.  
115 Lim and Honeck (2009), p. 138. 
116 Where the sector is committed, full commitments are taken in 13 schedules out of 23 in higher 
education; 14 schedules out of 23 in primary, six out of 23 in secondary, and seven schedules out of 23 in other 
education.  
117 See Adlung, (2006) for a discussion of public services and the GATS.   S/C/W/313 
 Page 21 
 
 
  the scope of coverage to private education with any necessary limitations on market access and 
national treatment.  As demonstrated by existi ng GATS commitments, a number of WTO Members 
have limited the scope of specific commitments to privately provided education services by, for example, excluding educational institutions that ha ve government equity or which receive government 
assistance.  There are many ways  by which specific commitments can be conditioned so as to suit 
national policy objectives.  Exercising scheduling flex ibility to define the scope of coverage may be 
particularly pertinent to higher education, si nce public universities are increasingly engaged in 
commercial revenue generation activ ities and may not be fully dependent on government funding. 
 
 
63. The two main ways by which Members have sought  to explicitly limit the sector scope is by 
taking commitments which cover only: (i) privately funded education services; or (ii) non-compulsory 
education.   Examples of such exclusions are provided in Table 9.  
Table 9: Examples of sectoral exclusions a  
Types of sectoral exclusions Examples  
By source of funding "Privately funded primary education services (part of CPC 921)" 
"Privately funded education services (CPC 921, 922, 92310, 924, 929)" 
"Higher education services priv ately funded only (CPC 923**)" 
"The educational services listed below are limited to privately funded 
education services and exclude educatio n services funded from government 
sources" 
"All education services included in this section: Sub-sectors listed below 
only cover privately funded education services" 
By programme of study "B. Secondary education services (CPC 922, excluding national compulsory 
education in CPC 92210)" 
"C. Higher Education Services (CPC 923**) Covers provision of private 
tertiary education services including at university level" 
"Other Adult Education Services not provided by the State" 
a These limitations are cited as examples and are for illustration purposes only. 
Source : Based on a review of all WTO Sc hedules of Specific Commitments 
 
 
B. MODAL COVERAGE  
64. Regarding cross-border supply (mode 1 ), the highest number of full commitments  are found in 
higher education followed by adult education.  The number of full commitments is lower in primary, 
secondary and other education.  Commitments by recently acceded Members ac count for the largest 
share of full commitments, with over two-thirds of all existing mode 1 commitments having been 
inscribed without limitations.  Partial commitments  for mode 1 typically entail sector-specific 
limitations such as restrictions on the granting of financial assistance for study abroad; restrictions on the supply of the service only to foreign students in the host territory; nationality requirements; and 
restrictions on the content of permitted pr ogrammes of study and their duration.  S/C/W/313 
Page 22  
 
  Table 10:  Percentage breakdown of  full commitments on market acce ss according to sub-sectors and 
modes of supply (mode 1 to 3)  
Full commitments 
(as a percentage of schedules with  commitments in the sub-sector) 
Sub-sectors Mode 1 Mode 2 Mode 3 
Primary education  53 74 47 
Secondary education 44 63 39 
Higher education 67 71 45 
Adult education 61 66 51 
Other education 48 56 44 
a EC 12 is counted as one.   
Source : WTO Secretariat 
 
 
65. Consumption abroad (mode 2 ) consistently accounts for a higher percentage of full 
commitments than modes 1 and 3 (Table 10).  As  in many other services sectors, it appears that 
Members saw less need - or scope – for restricting trade under mode 2 than for any other mode of 
supply.  
66. For both modes 1 and 2, the consideration of the sector-specific commitments in conjunction 
with horizontal limitations does not substantially reduce the overall level of full commitments.  The 
very few limitations listed refer to subsidies an d other forms of public assistance, and foreign 
exchange restrictions.118  
67. Regarding commercial presence (mode 3 ), the pattern of commitments is rather mixed.  While 
full commitments are prevalent in "higher" and "adu lt" education sub-sectors, in comparison to other 
modes of supply, a greater number of limitations have been scheduled (see Annex 7).   Examples of limitations that are specific to education services are restrictions on: financial assistance for studies at 
non-certified/recognised institutions; the student p opulation that may be targeted (e.g. foreign 
institutions are only to enrol foreign students); th e establishment of for-profit juridical persons; the 
granting of state recognised diplomas/degrees by private institutions; and access for publicly funded 
institutions.  Other limitations relate to authoriza tion or licensing requirements, real estate acquisition, 
the types of legal entity and participation of foreign capital.  It is notable that commitments taken by 
recently acceded Members are relatively free of limitations.  Where there are restrictions these typically relate to measures on legal en tity and foreign capita l participation.  
68. Commitments on presence of natural persons (mode 4
) are largely similar to those for other 
sectors, guaranteeing entry for certain categories of  persons, subject to particular conditions on 
duration. As with other sectors, there are few sector specific limitations with respect to mode 4.  Where such limitations exist, they typically specify the type of qualifications that the service supplier 
must possess, as well as nationality and residence requirements.  
C. MFN
 EXEMPTIONS  
69. An MFN exemption specific to education ser vices has been listed in only one case.  The 
exemption preserves the right to grant preferential treatment in respect of the implementation of 
student exchange programmes, visits by educator s, and for educational institutions to promote 
cooperation for cultural exchange.119  
                                                      
118 The latter restriction would need to be read in light of Article XI:1.  
119 FYR Macedonia.  S/C/W/313 
 Page 23 
 
 
  D. EDUCATION SERVICES IN PREF ERENTIAL TRADE AGREEMENTS  
70. A survey of 32 preferential trade agreements  (PTAs) with services commitments found that 
some improvements over GATS commitments had been made in education services.120  The situation 
varied quite considerably from one PTA to anot her and differences exist between commitments taken 
in negative-and positive list PTAs.   In particular ,  improvements were relatively more extensive in 
negative-list PTAs since full commitments are assumed for all services unless reservations are 
taken.121  Often as a result of the PTA, Members that  have no existing GATS commitments for this 
sector, took commitments for the first time. There were also some improvements reported in positive-
list PTAs.  These improvements were mainly in the form of wider sectoral coverage and the easing of restrictions on foreign equity limits.
122   
71. However, there are important carve-outs in PTA s that have a bearing on education services.  
In virtually all PTAs, services provided in the exercise of governmental authority are carved-out.  The conditions for the carve-out are similar to those fo und in Articles I.3 (b) and (c) of the GATS. In 
negative-list PTAs, reservations are typically taken on the right to impose new restrictions on public 
education services to the extent that these are soci al services maintained or established for a public 
purpose or interest.
123  
IX. BARRIERS TO TRADE AND REGULATORY ISSUES 
A. MAIN OBSERVATIONS  
72. Several trade barriers specific to the educati on sector were discussed in the previous Note 
(S/C/W/49).124  These observations continue to remain larg ely relevant. Greater emphasis is given in 
this Note to modes 1 and 3, as well as to cro ss-cutting issues such as accreditation requirements and 
the non-recognition of qualificati ons.  Moreover, given the importa nce of quality assurance to all 
modes of supply, these are discussed separately in section IX.B.   
73. In terms of cross-border supply  (mode 1), main measures that are commonly cited relate to:  
restrictions on the electronic transmission of course material, as well as the use/import of educational materials; non-recognition of qualifications obtai ned through distance learning; quotas or economic 
needs tests restricting the number of suppliers; restri ctions on payments and transfer of funds abroad; 
discriminatory local accreditation and recognition requi rements; restrictions on the types of courses 
that may be offered; and measures requiring the use of  a local partner, or the physical presence of the 
foreign institution.
125   
74. While formal trade barriers may not be that pr evalent, some important regulatory issues have 
arisen in respect of cross-border supply of edu cation services.  Over the past decade, regulatory 
frameworks have been established to ev aluate and accredit cross-border education.126  I n  s o m e  
economies, cross-border distance education progr ammes cannot obtain formal approval to grant 
                                                      
120 Roy, Marchetti and Lim (2007). 
121 Lim and Honeck (2009), p. 147 provides some examples. 
122 Ibid. 
123 Ibid. p. 148. 
124 The terms "barriers to trade" or "restrictions" are used here to gene rally refer to measures that may 
negatively affect trade, and not to de pict solely limitations on market access or national treatment as per Articles 
XVI and XVII of the GATS. 
125 This is not an exhaustive list, but summarises some of the main barriers that have been cited in 
various studies.  
126 Middlehurst and Woodfield (2004). S/C/W/313 
Page 24  
 
  degrees or other qualifications that are locally recognised without local presence.
127  According to a 
survey undertaken by APEC, lack of recognition app ears to be the main barrier affecting online and 
distance education.128  
75.  While cross-border supply has the advantage of being able to rapidly increase access to 
education services, there are particular consumer pr otection and quality assurance issues  that need to 
be addressed.  The problems posed by fraudulent edu cation providers or "diploma mills" are well 
known.129  For the regulator, unless there is some loca l presence, suppliers of fully-online distance 
education programmes are effectively invisible an d difficult to track. On the other hand, mode 1 
supply by definition suggests that the service is be ing supplied from outside the territory in which the 
student is located, without local presence.  Thus, according to some observers, cross-border supply 
through twinning arrangements betw een local private colleges and foreign institutions has become 
more viable than pure distance learning.   
76. Given that the bulk of trade in the sector still takes place through consumption abroad  (mode 
2), measures restricting the mobility of students have warranted particular attention.  However, it is 
important to distinguish between measures take n by the home and host economy of the student.  
Schedules of specific commitments only contain ma rket access or national treatment commitments 
taken by the home economy in relation to the consumption of services abroad.  Measures taken by host economies with regard to the entry of students or  the conditions of their stay are not covered by 
schedules of specific commitments.   
77. In terms of measures taken by home economies, current patterns of commitments suggest that 
there are very few governments which restrict students from studying abroad.
130  If there are direct 
restrictions, these generally take the form of exit visas and foreign currency controls.131  O t h e r  
measures that may affect trade under this mode of  supply may be the non-portability of subsidies for 
study at institutions located in another territory.  There may also be indirect barriers such as 
difficulties faced by students in obtaining recogniti on for qualifications obtained abroad.  In this 
regard, the development of agreements concerni ng standards for professional training, licensing and 
accreditation might significantly benefit trade in this mode, as foreign-earned degrees become more 
portable.  On the other hand, formal certificati on and/or recognition may not be that critical for non-
licensed professions.   
78. When establishing commercial presence  (mode 3), education service suppliers face the usual 
limitations on the numbers of perm itted suppliers, legal form (incl uding joint venture requirements), 
foreign equity capital limits and discriminatory tax/fiscal measures.132  In the case of legal form, in 
some economies, higher education institutions ma y only be constituted as non-profit organizations.133  
Other measures or practices that have a bearing on mode 3 trade, include the possibility to obtain 
national accreditation (e.g., to be recognized as a degree/certificate granting educational institution), 
nationality requirements on faculty staff, numbers of student that can be enrolled, restrictions on the 
recruitment of foreign academic personnel and the no n-recognition of qualifications awarded. In some 
                                                      
127 APEC (2009) and unpublished research on regulatory frameworks in education services by 
Christopher Ziguras of RMIT.  
128 APEC (2009), the survey was on all 21 APEC economies with most complete responses received 
from Australia, Chile, Indonesia, Japan, Mexico, New Zealand, Peru, Chinese Taipei and Thailand. 
129 See for instance, "Diploma Mills and Fake Degrees", at 
http://www.elearners.com/resources/diploma-mills.asp.  
130 In a survey by APEC (2001) only three out of 15 economies were found to have any such measures.  
131 It should be noted that visa requirements per se  are outside the scope of the GATS, pursuant to the 
GATS' Annex on the Movement of Natural Persons.  
132 The APEC (2001) study found that foreign equity limits and requirements on legal form were the 
two most frequently reported measur es affecting commercial presence. 
133 A common restriction found in the APEC (2009) survey.  S/C/W/313 
 Page 25 
 
 
  cases, students enrolled at these institutions do no t qualify for government benefits or financial 
assistance.  In addition, foreign institutions may not be able to access government funds and/or 
support given to domestic institutions.134 
79. Branch campuses and other forms of commercial presence in education may also be subject to 
regulatory frameworks that apply separately to priv ate institutions.  A major influence on education 
services supplied through commercial presence are regula tions governing the entities that may register 
and be accredited as education providers.135  In some cases, private institutions are regulated in terms 
of student numbers, tuition fees, accreditation and quality assurance requirements, as well as with regard to the qualifications and competence of teaching staff.
136  While consumer protection and 
quality assurance objectives underpin such regulation, these could nevertheless affect the ability of a 
supplier to establish commercial presence.  In some  cases, further distinctions are made between 
profit and non-profit providers, with fewer restric tions or regulatory requirements in the case of the 
latter.137 
80. Restrictions on the presence of natural persons  (mode 4) commonly relate to immigration 
requirements138, quotas on numbers of mode 4 service suppliers, nationality or residence requirements 
and labour market tests. Often, these are horizontal  measures which are not specific to the education 
sector.   In education, mode 4 commitments typica lly apply to teachers, academics, managers or 
marketing staff travelling across national borde rs to either set up franchise and twinning 
arrangements, or to provide instruction.  The ea sing of restrictions for such specialized personnel 
would facilitate trade undertaken under cross-borde r supply and/or through commercial presence.  
81. Trade in education services is facilitated by  various initiatives aimed at enhancing the 
mobility of consumers and providers of educati on services.  Such initiatives are usually aimed at 
improving scientific and technological cooperation,  as well as cultural understanding.  They are 
concluded at both the inter-governme ntal and non-governmental levels and take the form of student, 
academic and research exchange programmes.  A great number of these programmes exist and it would be beyond the scope of this Note to summarise them.
139  A few regional examples include: the 
North American Student Mobility Programme140;  the European SOCRATES/ERASMUS 
Programme141;  and the University Mobilit y in Asia-Pacific Programme.142     
B. QUALITY ASSURANCE AND RECOGNITION  
82. A major concern in the education sector is the need to ensure that the quality of education 
services meets a minimum standard so as to protect th e interests of the consumer and the integrity of 
the education system.  Quality assurance is, in tu rn, closely related to regimes for accreditation and 
recognition of qualifications.  Greater trade in education services, especially at the tertiary level, has 
posed new challenges in this regard.  In many  economies, existing national systems often focus 
                                                      
134 A common restriction found in the APEC (2009) survey.  
135 Centre for International Economics (2008), pp. 14-19. 
136 For example, the Malaysian Private Higher Educational Institutions Act, regulates local and foreign 
higher education institutions separately from public in stitutions.  In 2000, Tunisi a adopted legislation for 
regulating the private higher education sector.  Since 1997, Hong Kong, China has regulated the provision of foreign courses in its territory th rough the Non-local Higher and Professional Education (Regulation).  See 
descriptions in McBurnie and Ziguras (2001). 
137 APEC (2009). 
138 See, however, GATS Annex on Movement of Natural Persons Supplying Services Under the 
Agreement. 
139 The main programmes and arrangements by region are described in OECD (2004). 
140 See further details at http://www2.ed.gov/programs/fipsenortham/index.html 
141 See further details at http://ec.europa.eu/educ ation/lifelong-learning-p rogramme/doc80_en.htm 
142 See further details at http://www.umap.org/2009/en/home/index.php S/C/W/313 
Page 26  
 
  exclusively on services provided by domestic institu tions.  There is also great diversity in quality 
assurance and accreditation systems across the world.
143 
83. With increased trade, particularly through modes 1 and 3, national authorities face the 
challenge of either applying existing systems to foreign services and suppliers or creating wholly new 
frameworks.  The challenge is particularly acute for developing countries, especially in terms of 
building capacity in quality assurance for the education sector.144  On the one hand, students and 
employers need to have confidence in the quality of the education received, and be protected from 
fraudulent or sub-standard providers.  On the other hand, international providers need to be assured 
that quality, accreditation and recognition systems are based on objective criteria, and that adequate 
verification procedures exist.   
84. Various initiatives have been taken at the nationa l and international level in response to these 
challenges.145   The International Network for Quality  Assurance Agencies in Higher Education 
(INQAAHE) has published guidelines on good practice based on 10 general principles.146  In 2005, 
UNESCO and OECD, after consultation with their respective sets of members, prepared a set of "Guidelines for Quality Provision in Cross-Border Higher Education".  The Guidelines published by 
the OECD recommend good practices for a range of stakeholders and call on governments, both 
sending and receiving, to establish mechanisms fo r the accreditation and quality assurance of all 
institutions in their territory. 
 
85. UNESCO and the Asia-Pacific Quality Network (APQN), a regional association of quality 
assurance professionals, have prepared a toolkit on regulatory considerations, including examples of 
approaches taken at the national level.147 Regulatory approaches vary from licensing or registration 
systems, where academic standards are not set, to  accreditation systems which specify academic as 
well as other requirements and standards. Quality assurance may also be of concern to the home 
government of the foreign service supplier which is  interested in upholding the reputation of its 
education and qualification system, especially si nce it could have a bearing on the status and 
recognition of qualifications aw arded to domestic students.   
86. Recognition of academic and professional qualificat ions is closely linked to the issue of 
quality assurance and accreditation.  The UNE SCO Regional Conventions on recognition of 
qualifications have been the main international instruments addressing the recognition of academic 
qualifications for academic purposes and sometim es play a role in recognising diplomas for 
professional purposes.148  At present there are six regional conventions on the recognition of 
qualifications (Africa, Arab States, Asia and Pa cific, Latin America and the Caribbean, and two 
European conventions) as well as one interregiona l convention (Mediterranean Convention).  The 
Bologna Process, although of European origin, is  also a leading instrument on the issue of 
harmonisation and comparability of programmes a nd degrees.   The process, with the goal of 
permitting students, faculty and graduates to move  freely across national borders, started with 29 
economies and now includes over 40, with the inclusion of many developing countries.149  Other 
processes that can have a positive impact on trade in education services include the conclusion of 
                                                      
143 Hopper (2007) and OECD (2005), p. 2. 
144 See Hopper (2007). 
145 See Fielden and LaRocque (2009) for a discussion of the evolving regulatory context for private 
education in emerging economies. 
146 INQAAHE was established in 1991 as a profession al association in support of quality assurance 
agencies. See http://www.inqaahe.org. 
147 UNESCO (2006), in particular pp.51-61 and Hopper (2007). 
148 These Conventions are available at  http://portal.unesco.org/education/en/ev.php-
URL_ID=13880&URL_DO=DO_TOPIC&URL_SECTION=201.html 
149 Hopper (2007), p. 111.  S/C/W/313 
 Page 27 
 
 
  mutual recognition agreements, which are rela tively easier to achieve than harmonisation.150  Overall, 
greater cooperation between national quality assura nce agencies, and the development of common 
standards will be an important factor in the fu ture internationalization of education services.  
_______________ 
  
                                                     
 
150 Geloso-Grosso (2007), p. 169. S/C/W/313 
Page 28  
 
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Teferra, D (2008), African Higher Education: Projecting the Future, in International Higher 
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Education to 2030, Volume 2: Globalisation , Paris, OECD.  S/C/W/313 
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  Tham, S.Y and Ji, A.K.Y (2007), Trade and Investment Linkages in Higher Education Services in 
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The Observatory on Borderless Higher Education (2009), International Student Mobility Report: 
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UNESCO (2006), Global Education Digest 2006 , Paris, OECD. 
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Bangkok,  UNESCO, available at http://www2.unescobkk.org/elib/publications/087/APQN_Toolkit.pdf 
UNESCO (2007), Global Education Digest 2007 , Paris, OECD. 
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UNESCO (2009b), Trends in Tertiary Education: Sub-Saharan Africa , UIS Factsheet, July 2009, 
No.1. 
Vincent-Lancrin, S (2006), What is Changing in Academic Resea rch ? Trends and Future Scenarios , 
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Vincent-Lancrin, S. (2007), "Developing Capacity  through Cross-Border Tertiary Education in 
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(2009), Higher Education to 2030, Volume 2: Globalisation , Paris, OECD. 
Vincent-Lancrin, S (2009b), "Finance and Provision  in Higher Education: A shift from public to 
private?", in OECD (2009), Higher Education to 2030, Volume 2: Globalisation , Paris, OECD. 
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  S/C/W/313 
Page 32 ANNEX 1 
 
Definition of Education Services  
  
The Services Sectoral Classification List, Document MTN.GNS/W/120, was developed during the Uruguay Round for scheduling purpos es under the GATS.  It was based on the 
UN Provisional Central Product Classification (CPC) and the activ ities covered are defined mostly through reference to CPC code s.  Although WTO Members are not legally 
bound to determine the sectoral scope of their commitments  according to this classification, a large majority has done so, heed ing a recommendation contained in the so-called 
scheduling guidelines (S/L/92).  
Sectoral Classification List Relevant 
CPC No. Definition/coverage in provisional CPC 
5. EDUCATIONAL SERVICES   
 A.  Primary education services 921 Preschool education services: Pre-primary school education servi ces. Such education services are usually provided by nursery 
schools, kindergartens, or special sections attached to primary schools, and aim primarily to introduce very young children to 
anticipated school-type environment. Exclusion
: Child day-care services are classified in subclass 93321. 
  Other primary education services: Other primary school education se rvices at the first level. Such education services are inten ded 
to give the students a basic education in diverse subjects, an d are characterized by a relatively low specialization level. Exc lusion : 
Services related to the provisi on of literacy programmes for adults are classifi ed in subclass 92400 (Adult education services i.e.). 
B.  Secondary education services 922 General secondary education servi ces: General school education services at the s econd level, first stage. Such education servic es 
consist of education that continues the basic programmes taught at the primary education level, but usually on a more subject-
oriented pattern and with some beginning specialization. 
  Higher secondary education services: Genera l school education services at the sec ond level, second stage. Such education 
services consist of general education progr ammes covering a wide variety of subjects involving more specialization than at the 
first stage. The programmes intend to qualify students either fo r technical or vocational education or for university entrance 
without any special subject prerequisite. 
  Technical and vocational secondary education services: Technical and vocational education services  below the university level. 
Such education services consist of programmes emphasizing subject -matter specialization and instruction in both theoretical and  
practical skills. They usually apply to specific professions. 
  Technical and vocational secondary school -type education services for handicappe d students: Technical and vocational 
secondary school-type education services sp ecially designed to meet the possibilities  and needs of handicapped students below 
the university level.  
   S/C/W/313
 Page 33Sectoral Classification List Relevant 
CPC No. Definition/coverage in provisional CPC 
C.  Higher education services 923 Post-secondary, technical and vocational education services: Post-secondary, sub-degree technical and vocational education 
services. Such education services consist of a great variety of subject-matter programmes. They emphasize teaching of practical  
skills, but also involve substantial theoretical background instruction. 
  Other higher education services: Education se rvices leading to a university degree or equivalent. Such education services are 
provided by universities or specialized professional schools. Th e programmes not only emphasize theoretical instruction, but al so 
research training aiming to prepare students for participation in original work. 
D.  Adult education  
 924 Adult education services i.e.:  Education services for adults who are not in the regular school and university stem. Such educa tion 
services may be provided in day or evening classes by schools or by special institutions for adult education. Included are 
education services through radio or television broadcasting or by correspondence. The programmes may cover both general and 
vocational subjects. Services related to literacy programmes for adults are also included. Exclusion : Higher education services 
provided within the regular education system are classified in  subclass 92310 (Post-secondary technical and vocational educatio n 
services) or 92390 (Other higher education services). 
E.  Other education services  929 Other education services: Education services at the first and s econd levels in specific subject matters not elsewhere classifie d, and 
all other education services that are not definable by level. Exclusions : Education services primarily concerned with recreational 
matters are classified in class 9641 (Sporting services). Educat ion services provided by governess or tutors employed by privat e 
households are classified in subclass 98000 (Private households with employed persons). 
Source : United Nations, Provisional Cent ral Product Classification, 1991. 
 
 
 S/C/W/313 
Page 34  
 
  ANNEX 2 
 
Breakdown of foreign students in the major OECD regions (percentage), 2007, 
 
and changes between 1998 and 2007 (percentage points)a 
 
 
Destination North America Europe Asia Pacific Total OECD 
Origin 2007 98-07 2007 98-07 2007 98-07 2007 98-07 
Africa 8 2 18 2 2 0 12 2 
North America 5 -6 3 -2 3 0 4 -3 
South America 12 7 5 2 1 0 7 4 
Asia 61 -1 29 4 85 2 48 2 
Europe 14 -1 44 -7 5 -2 29 -4 
Oceania 1 0 0 0 3 -1 1 0 
Total 100 0 100 0 100 0 100 0 
 
a The total percentage is not always 100 per cent (and the sum of changes 0) due to rounding.  Interpretation: in North 
American OECD countries, 8 per cent of the foreign students originated from Africa in 2007, compared with 6 per cent in 
1998 (plus 2 percentage points). 
Source :  Vincent-Lancrin, S (2009), p.68  S/C/W/313 
 Page 35 
 
 
  ANNEX 3 
 
Major destinations of interna tional student mobility, 1999-2008  
 
 
Country 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
US 490,933 514,723 547,867 582,996 586, 323 572,509 565,039 564,776 582,984 623,805 
UK 219,285 224,660 230,870 242,755 275,270 300,055 318,400 330,080 351,470 389,330 
Australia 119,988 138,381 168,916 193,137 217,646 235,131 255,113 279,989 325,935 389,373 
Germany 165,994 175,065 187,027 206,141 227,026 246,136 246,334 248,357 246,369 N/A 
France 151,969 160,533 174,080 196,748 221, 471 244,335 255,585 265,710 263,094 260,596 
China 44,711 52,150 61,869 85,829 77, 715 110,844 141,087 162,695 195,503 223,499 
Japan 55,755 64,011 78,812 95,550 109, 508 117,302 121,812 117,927 118,498 123,829 
Canada 53,111 62,260 76,398 87,455 96,918 102,557 106,233 108,688 113,996 N/A 
New Zealand 11,856 16,586 26,236 40, 825 47,116 50,442 47,366 42,652 39,942 N/A 
Singapore N/A N/A N/A 11,000 N/A N/A 50,000 60,000 86,000 N/A 
Malaysia N/A N/A N/A 28,872 30,397 31,674 40,525 44,390 66,000 72,000 
Korea, Rep. of  N/A N/A N/ A N/A 12,314 N/A N/ A N/A 49,270 63,952 
 
Source : The Observatory on Borderless Higher Education (2009), p.45 
 S/C/W/313 
Page 36  
 
  ANNEX 4 
 
Selected exporters and impor ters of education services 
 
(either cross-border or through the presence of natural persons), 2007  
(Million dollars and percentage)  
 
Rank Exporters Value Share in 
20 
econo-
mies Annual 
% 
change Rank Importers Value Share 
in 20 
econo-
mies Annual 
% 
change 
1 United Statesa 1240 56.7 -3 1 United Statesa 784 46.0 -4 
2 Australia 304 13.9 14 2 Korea, Rep. of 157 9.2 38 
3 Italy 195 8.9 68 3 Italy 150 8.8 18 
4 Canada 148 6.8 48 4 Canada 121 7.1 -24 
5 Malta 53 2.4 24 5 Portugal 116 6.8 76 
6 Korea, Rep. of 47 2.2 121 6 Austria 67 3.9 34 
7 Portugal 38 1.7 10 7 Australia 56 3.3 -16 
8 Syrian Arab Rep. 30 1.4 -25 8 Slovak Rep. 51 3.0 2 
9 Poland 26 1.2 5 9 Hungary 38 2.2 80 
10 New Zealand 24 1.1 45 10 Poland 34 2.0 -9 
11 Cyprus 19 0.9 45 11 Czech Rep. 21 1.3 31 
12 Austria 16 0.8 -13 12 New Zealand 21 1.2 38 
13 Slovak Rep. 16 0.7 64 13 Syrian Arab Rep. 20 1.2 67 
14 Hungary 11 0.5 -19 14 Liberia 19 1.1 -44 
15 Czech Rep. 6 0.3 7 15 Cyprus 15 0.9 11 
16 Serbia 4 0.2 185 16 Kyrgyz Rep. 8 0.5 -33 
17 Azerbaijan 3 0.1 8 17 Serbia 8 0.5 42 
18 Albania 3 0.1 -69 18 Albania 5 0.3 -86 
19 Slovenia 3 0.1 4 19 Azerbaijan 5 0.3 9 
20 Luxembourg 3 0.1 130 20 Bolivarian Rep. 
of Venezuela 5 0.3 ... 
  Above 20 2188 100.0    -  Above 20 1703 100.0    - 
Note :  Based on information available to the Secretariat. 
a This item refers to training services in the U.S. classification 
  S/C/W/313 
 Page 37 
 
 
  ANNEX 5 
 
Public expenditure on education as percentage of Gross National Income (GNI) and per pupil  
as percentage of Gross Domestic Product (GDP) per inhabitant  
 
 
Continents, major 
areas and groups of 
countries Public expenditure on education as % of 
GNI Public expenditure on education per 
pupil as % of GDP per capita 
 2000 2003 2006 2008 2000 2003 2006 2008 
World total 4.7 5.0 4.8 4.5 20.6 21.8 21.7 18.4 
Africa 4.3 4.8 5 4.8 23.2 23.6 25.7 19.2 
America  5.0 5.1 4.6 5.0 17.8 17.6 16.2 12.9 
Asia 3.9 4.2 4.1 3.7 19.1 19.4 19.6 16.4 
Europe 5.1 5.4 5.5 N/A 23.4 24.2 24.4 34.3 
Oceania 6.6 7.4 6.0 6.2 15.3 20.2 19.7 N/A 
Developing countries 4.7 4.9 4.7 4.5 19.4 20.2 20.6 17.4 
Sub-Saharan Africa 4.0 4.5 4.9 4.8 22.1 22.8 25.7 19.2 
Arab States 5.8 5.2 4.8 4.8 21.8 23.7 17.8 N/A 
Latin America and 
the Caribbean 5.0 5.1 4.5 5.0 17.8 17 15.5 12.9 
Eastern Asia and 
Oceania 6.4 6.1 3.6 N/A 14.4 20.1 19.3 N/A 
Southern Asia 3.7 4.1 4.3 4.6 21.4 14.2 17.5 15.5 
Least developed 
countries 4.1 4.6 4.6 4.4 21.5 20.0 26.8 18.3 
Developed countries 5.1 5.5 5.3 N/A 22.9 23.9 23.9 N/A 
 
Source : UNESCO Database, March 2010. 
 S/C/W/313 
Page 38  
 
  ANNEX 6  
 
Summary of specific commitments - education services
 
  
Countries 05.A. 05.B. 05.C. 05.D. 05.E. 
Albania X X X X  
Armenia   X X  
Australia  X X  X 
Austria X X  X  
Bulgaria X X  X  
Cambodia   X X X 
Cape Verde  X X X X 
China X X X X X 
Congo RP   X   
Costa Rica X X X   
Croatia  X X X X 
Czech Republic X X X X X 
Estonia X X X X X 
European Union  X X X X  
FYR Macedonia   X X X  
Georgia X X X X  
Gambia X   X X 
Ghana  X   X 
Haiti    X  
Hungary X X X X  
Jamaica X X X   
Japan X X X X  
Jordan X X X X X 
Kyrgyz Republic X X X X  
Latvia X X X X  
Lesotho X X X X X 
Liechtenstein X X X X  
Lithuania X X X X  
Mali    X  
Mexico X X X  X 
Moldova X X X X X 
Nepal   X X X 
New Zealand X X X   
Norway X X X X X 
Oman X X X X  
Panama X X X   
Poland X X X X  
Rwanda    X  
Saudi Arabia X X X X X 
Sierra Leone X X X X X 
Slovak Republic X X X X X 
Slovenia  X X X  
Switzerland X X X X  
Chinese Taipei  X X X X 
Thailand X X  X  
Tonga X X X X X 
Trinidad and Tobago   X  X 
Turkey X X X  X 
Ukraine X X X X X  S/C/W/313 
 Page 39 
 
 
  Countries 05.A. 05.B. 05.C. 05.D. 05.E. 
USA    X X 
Viet Nam  X X X X 
Total Number of Schedules 34 41 42 41 25 
 
Legend: 
 05.A. Primary Education Services 
 05.B. Secondary Education Services 
 05.C. Higher Education Services 
 05.D. Adult Education 
 05.E.Other Education Service 
Source : WTO Secretariat 
 S/C/W/313 
Page 40  
 
  ANNEX 7 
 
Overview of market access commitments for modes 1, 2 and 3 on education services 
 
(number of Members) * 
Cross-border Supply 
(Mode 1) Consumption Abroad 
(Mode 2) Commercial Presence 
(Mode 3) Sector Total Number 
of Members 
 
Fulla PartialbNoc Fulla Partial No Fulla Partial No 
Primary 
Education 
Services 34 18 7 9 25 6 3 16 16 2 
Secondary 
Education 
Services 41 18 16 7 26 14 1 16 22 3 
Higher 
Education 
Services 42 28 10 4 30 10 2 19 21 2 
Adult Education 
 41 25 13 3 27 14 0 21 19 1 
Other Education 
Services 25 12 11 2 14 11 0 11 12 2 
 
a Full commitments: no lim itations listed, wit hout considering Hori zontal Limitations. 
b Partial commitments: limitations listed.  
c No: Unbound.  This category may nevertheless provi de for some form of national treatment. 
* Considering the EC-12 as one. 
Source :  WTO Secretariat 
 
  S/C/W/313 
 Page 41 
 
 
  ANNEX 8 
 
Types of market-access restrictions – sector-specific section  
(number of cases)  
 
 
Sectors and Subsectors Mode a c d e f g h Total 
1 1 - - 3 - 8 2 14  
2 - - - - - 4 - 4  
3 3 1 - 27 15 19 17 82  05. Educational Services 
4 - - 6 - - - 16 22  
1 - - - 1 - 2 1 4  
2 - - - - - 1 - 1  
3 - - - 6 3 5 2 16  05.A. Primary Education Services 
4 - - 1 - - - 4 5  
1 1 - - 1 - 2 - 4  
2 - - - - - 1 - 1  
3 - - - 7 3 5 3 18  05.B. Secondary Education Services 
4 - - 1 - - - 4 5  
1 - - - - - 2 1 3  
2 - - - - - 1 - 1  
3 2 - - 7 3 6 4 20  05.C. Higher Education Services 
4 - - 2 - - - 4 6  
1 - - - - - 2 - 2  
2 - - - - - 1 - 1  
3 1 1 - 4 3 2 4 15  05.D. Adult Education 
4 - - 1 - - - 1 2  
1 - - - 1 - - - 1  
2 - - - - - - - - 
3 - - - 3 3 1 4 11  05.E. Other Education Services 
4 - - 1 - - - 3 4  
Legend: 
a) Number of suppliers     e)  Types of legal entity  
b) Value of transactions or assets    f)  Participation of foreign capital  
c) Number of operations     g) Other market access measures  
d) Number of natural persons    h)  National treatment limitations S/C/W/313 
Page 42  
 
  ANNEX 9 
 
Types of national treatment limitations – sector-specific section 
 
(number of cases)  
 
 
Sectors and Subsectors Mode a b c d e f g h m n Total 
1 - 2 5 3 - - - 3 - - 13 
2 - 2 5 - - - - - - - 7 
3 - 2 5 21 - 5 - 11 - 3 47 05. Educational Services 
4 1 2 5 7 3 12 1 5 2 1 39 
1 - - 1 1 - - - 1 - - 3 
2 - - 1 - - - - - - - 1 
3 - - 1 3 - 1 - 2 - 1 8 05.A. Primary Education Services 
4 - - 1 2 1 3 - 2 1 - 10 
1 - - 1 1 - - - 1 - - 3 
2 - - 1 - - - - - - - 1 
3 - - 1 5 - 1 - 2 - 1 10 05.B. Secondary Education Services 
4 - - 1 2 1 3 - 2 1 - 10 
1 - - 1 1 - - - 1 - - 3 
2 - - 1 - - - - - - - 1 
3 - - 1 5 - 1 - 3 - - 10 05.C. Higher Education Services 
4 1 - 1 1 1 3 1 - - 1 9 
1 - 1 1 - - - - - - - 2 
2 - 1 1 - - - - - - - 2 
3 - 1 1 4 - 1 - 2 - 1 10 05.D. Adult Education 
4 - 1 1 1 - 2 - - - - 5 
1 - 1 1 - - - - - - - 2 
2 - 1 1 - - - - - - - 2 
3 - 1 1 4 - 1 - 2 - - 9 05.E. Other Education Services 
4 - 1 1 1 - 1 - 1 - - 5 
Legend: 
a) Tax measures h) Authorisation requirements 
b) Subsidies and grants i) Performance requirements 
c) Other financial measures j) Technology transfer requirements 
d) Nationality requirements k) Loca l content, training requirements 
e) Residency requirements l) Ownership of property/land 
f) Licensing, standards, qualifications  m) Other national treatment measures 
g) Registration requirements  n) Market access limitations 
 
   
__________