Original publication: December 2016
Authors: Michael Hahn, Institute for European and International; Economic Law & World Trade Institute, University of Bern; Pierre Sauvé, World Trade Institute, University of Bern
Short link to this post: http://bit.ly/2DN07XE

This study responds to a request by the European Parliament’s Committee on Culture and Education (CULT) for an analysis of the treatment of culture and education services in the recently-concluded EU-Canada Comprehensive Economic and Trade Agreement (CETA).

 

The CETA marked (for the EU) significant changes in negotiating modalities in the fields of services and investment. This involved a shift in the manner in which the Parties undertake negotiated market opening commitments under the Treaty, from a WTO-GATS-type positive or hybrid list approach to a NAFTA-type negative list approach. Notwithstanding such changes, both Canada and the European Union have secured under the CETA negotiated outcomes fully aligned to – and wholly consistent with – those achieved by both Parties in their preceding trade and investment agreements at the bilateral, regional or multilateral levels. Simply put, the CETA marks no change to the long-held policy of both Parties to retain full policy immunity by eschewing substantive disciplines and market opening commitments in matters of culture and publicly- funded education services. In the case of Canada, however, an absence of reservations targeting measures governing privately-funded education services suggests that CETA has generated a WTOplus outcome in liberalization terms. The EU, for its part, has sought to preserve full policy immunity in regard to future measures governing both publicly- and privately-funded education services.

In the case of audiovisual services (for the EU) and cultural industries (for Canada), the CETA’s preamble affirms both Parties’ commitments as signatories of the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions. The Preamble further recalls the sovereign right of states to preserve, develop and implement their cultural policies, and to support their cultural industries for the purpose of strengthening the diversity of cultural expressions, and preserving their cultural identity, including through the use of regulatory measures and financial support.

Beyond the treaty’s preambular provisions, both Parties have sought to preserve, including for purposes of future policy changes, full policy immunity in matters of cultural policy. They have done so through an explicit carve-out of the sector from the scope of the Agreement’s chapters dealing with Subsidies (Chapter 7), Investment (Chapter 8), Cross-Border Trade in Services (Chapter 9), Domestic Regulation (Chapter 12) and Government Procurement (Chapter 19).

In the case of education services, for which, unlike culture-related matters, no sectorspecific exclusion exists under the CETA, the Parties have pursued a two-track approach. This has consisted of: (i) carving out from the ambit of the CETA’s Investment and Cross-Border Trade in Services chapters activities carried out or supplied in the exercise of governmental authority, the latter being defined, as in the manner of Article 1.3(b) and (c) of the World Trade Organization’s (WTO) General Agreement on Trade in Services (GATS) and of all preferential trade agreements of which Canada and the European Union are Parties, as activities or services that are “not supplied on a commercial basis nor in competition with one or more service suppliers”; and (ii) lodging, where necessary, negative list reservations against specific treaty obligations allowing the maintenance of existing – or the introduction of new – non-conforming measures (i.e. measures that violate core treaty obligations) in the sector.

With both Canada and the EU driven by defensive negotiating impulses in the educational and cultural fields, the CETA represented a missed opportunity to deepen complimentary and non-binding forms of cooperation between the Parties with a view to facilitating the mobility of artists and their creations as well as students and researchers in parallel to the CETA. Such cooperation continues to take place outside of – and wholly disconnected from – a trade policy setting.

Moving forward, consideration should be given to anchoring deepened forms of cooperation in matters of culture and education around the newly created opportunities flowing from trade- and investment-led integration. The EU-CARIFORUM Agreement took innovative first steps in this direction. Significant confidence-building scope exists to do more in an area traditionally laden with adverse attitudes towards trade governance. A welcome step in this direction was taken through Article 16 of the Strategic Partnership Agreement between the European Union and its Member States, of the one part, and Canada, of the other part, signed the same day as CETA.

Taking concrete steps towards innovative forms of cultural and educational diplomacy to trade-led forms of economic rapprochement – for instance through the CETA-related launch of a transatlantic scholarship scheme promoting enhanced academic cooperation, mobility and mutual learning on issues of common interest to the Parties, could help build needed bridges with civil society and offer a concrete illustration of the benefits that the desire for deeper and closer ties embedded in preferential economic relations can make possible.

Link to the full study: http://bit.ly/585-902

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Figure 1: Sectoral distribution of market access commitments under the General Agreement on Trade in Services

Alongside health-related services, a sector with which education shares many “public good” attributes, education ranks last among the service sectors in which members of the World Trade Organization (WTO) have scheduled market access commitments to date under the GATS. Less than a third of WTO Members, a majority of them recently acceding developing countries (confronting asymmetrical negotiating terms of entry) have scheduled commitments on selected privately-supplied educational services under the GATS. To the extent that most WTO Members, among them Canada and the EU, consider publicly funded education to be excluded from the substantive remit of the GATS and of preferential trade agreements (PTAs) covering trade and investment in services, such an outcome is hardly surprising.


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