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September 17, 2008

A new export niche for Jamaica?

Much of the lament following the latest failed talks of the Doha Round centered on liberalization of trade in agriculture. The hope, at least in part, was that a reduction in subsidies in the developed world could provide a stimulus to farmers in the developing world (never mind that the global rise in food prices would have been exacerbated in the short run by a reduction in subsidies). Coupled with the failed talks is a slowdown in the OECD economies, reducing overall demand for exports from the developing world. What's a developing country to do?

Jamaica has an idea - an article in the most recent International Higher Education points out that the island country is trying to position itself as an exporter of educational services. Forget about trade in physical goods; the General Agreement on Trade in Services (GATS) is the way to go, at least according to Jamaica's policymakers:

Jamaican trade policymakers suggested that GATS presented opportunities to position the country's higher education sector as an export industry. They proposed marketing the country's internationally recognized English-language higher education system to Latin American students, similar to how Australia and New Zealand marketed their system to Asian students. These policymakers also regarded the emigration of Jamaican graduates as contributing positively to the economy in the form of remittances. They were less concerned about potential threats from liberalization and the WTO.

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Very interesting post and I thank the author for raising this issue. In general, given that services are the dominant growth areas, GATS "is the way to go" for Jamaica and the rest of the Caribbean. I'm presuming that the focus on education is because of the journal in which the article was printed; certainly other areas, such as culture and sports, provide even greater potential for Jamaica.

The article raises concerns about whether Jamaica's GATS commitments are compatible with the country's development goals. The major issue that I can identify is the need to ensure that Jamaicans are not displaced in the educational institutions by foreign arrivals. This is very much in the hands of the government which can ensure that it attracts sufficient investment to increase the number of educational institutions, a development that can also benefit Jamaicans. In any event, it would be very difficult to imagine a scenario in which a WTO panel rules against the government for taking steps to ensure that its nationals receive priority access to publicly-funded institutions, and if that were to happen then there would be something very wrong indeed with the WTO process. So, I see no immediate conflict between the two end goals.

The greater issue, in my opinion, was the absence of civil society consultations prior to the inclusion of this offer in the country's GATS commitments. This was a common misstep during the Uruguay Round which the government must work to ensure does not repeat itself in the Doha Round, or in any future trade negotiations.


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