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Commerce of Education

Trade Agreements and the U.S. Economy, Educational Changes, Theory

By the end of the twentieth century, the world economy had shifted in two important ways. First, the free flow of capital had created a high level of global interdependency. Second, production and distribution were no longer regionally bound within the nation-state. Trade agreements provide evidence of these trends. Educational commodities in the global marketplace are evident as services and goods. Though increasingly evident, however, the effects of a growing global economic interdependence are not well understood theoretically or empirically.

Reactions to these changes range from an acceptance of democratic and economic possibilities to a resistance to open-market trends. Proponents embrace the economic order because these initiatives move their country toward the free flow of information and capital. Opponents recognize a power imbalance, and fear a loss in national identity. The arguments rest on the standardization processes couched within trade agreements.

Trade agreements encourage countries to participate in international standards organizations with a view toward harmonizing the technical regulations of individual countries. Organizations engaged in standards development call for increased certification, accreditation, and rigorous assessment of these standards. Adherence effectively allows labor to move freely across national boundaries. More subtly, it seems that nonelected governance bodies (e.g., a trade agreement) can become imbued within the architecture of a country's educational system.

Trade Agreements and the U.S. Economy

Trade agreements typically deal with the commodification of raw materials and manufactured goods. There are few systematic studies that address the practical impact of trade agreements on education. This is because the notion of treating services as tradable commodities is new, both internationally and nationally. The General Agreement on Trade in Services (GATS), concluded in April 1994, was the first broadly based international agreement on trade in services. In the 1980s the U.S. services sector moved into the competitive market, driven by the deregulation of telecommunications, financial services, banking, and transportation.

Trade agreements rarely address service sectors broadly, nor is education as a service generally addressed. For example, consider three ways in which education has been introduced in these agreements:

  1. Global agreements, such as the General Agreement on Tariffs and Trade and the World Trade Organization (GATT/WTO), generally mention education, but only as a low priority service item.
  2. Regional agreements, such as the European Community, the North American Free Trade Agreement (NAFTA), and the Association of Southeast Asian Nations (ASEAN), provide inconsistent structural recognition of education. For example, the Single European Act dealt with education issues only at the national level. However, when polled, a majority of Europeans felt that "testing, certification, technical standards, and science and research" should be handled at the European level.
  3. Bilateral agreements, such as those between Japan and United States, open up markets for provisional time periods.

The dominant trend in every facet of the United States economy is the shift from the production of goods to services. In 2000 the U.S. export of private services totaled $278.6 billion, exceeding imports by $78 billion.

Educational services encompass both programs and ancillary services. Programs are defined as sets of curricular activities that may lead to a certificate or degree. These may include aspects of the following: elementary, secondary, postsecondary, university, vocational, and technical education; child care; special education; adult and continuing education; corporate training; distributed learning; and technology-based training. Ancillary services are a necessary component to managing the needs of individuals and the logistics of servicing equipment. Activities include: the design, marketing, and sales of testing, certification, test preparation, tutoring, and other enhancement programs; management consulting; and administrative and human resources. Educational goods include the design, manufacture, and sale of textbooks, teaching materials, vocational and scientific equipment, software, videos, multimedia, school supplies, and furniture.

In 2000 U.S. exports of educational services totaled $10,287 million, which exceeded imports by $8,144 million and doubled the amount of exports in 1990 ($5,126 million). Asia and the Pacific Rim accounted for 55 percent of the 2000 export volume; Europe for 17 percent; and South America for 13 percent. In 1997 exports of educational goods included $11,600 million worth of textbooks and supplementary materials; $4,800 million in technology; and $3,000 million in testing and test preparation.

Educational Changes

Changes to educational systems are neither monolithic nor consistent. Changes in the content and form of educational services and goods occur at all levels and across cultures. The changes can roughly be categorized as being technological, organizational, social, or adaptive. These are not mutually exclusive categories, but provide a way to understand the complex interplay between global trade, the free-flow of information and labor, and the impact of trade on education. The role of technology in education can illustrate this complex interplay.

Information technology is one of the fastestgrowing economic sectors in the global economy almost without exception in every country. That is, countries at all different phases of development recognize the importance of being technologically connected. This may include funding projects for telecommunications infrastructure, buying hardware and software, or any type of technology training. Countries like South Africa or the twelve newly independent states of the former Soviet Union represent countries in transition to a market economy. Examining the telecommunications trade occurring in these countries can provide a helpful framework for imagining how to de-commodify education in these countries. Telecommunications in Sub-Saharan Africa has grown to 8 percent of the total market of goods and services. In Botswana the leading sector for U.S. exports and investment is in telecommunications; in Cote d'Ivoire telecommunications is the third leading export sector; in Guinea telecommunications is the sixth leading export sector and in Nambia it ranks fourth. In all cases, telecommunications follows agriculture or civil infrastructure sectors; i.e., it is ranked more important than household goods. Advanced computer technologies in multimedia, real-time delivery and e-mail through Internet connections, and the ease of use of interface of personal computer systems can drastically alter the traditional form and content of education. U.S. educational technology funding went from $23 million in 1994 to $766 million in 2000. In 1996 the Technology Literacy Challenge was issued in order to provide a major commitment of resources to connect every classroom to the Internet, expand access to modern, multimedia computers; make high-quality educational software an integral part of the curriculum; and enable teachers to effectively integrate technology into their instruction. Some argue, however, that access to computers does not improve reading scores, but that access to books does, and that money spent on computers is therefore better spent on libraries and reading programs.

At the postsecondary level, the impact of technology on education is illustrated by the growth in distance education, which is perceived to overcome geographic barriers to access, and may reduce costs. On the one hand, the challenges involved in implementing distance education include the need to handle organizational, management, and educational changes over the short and long term; limited access to quality programming among certain populations defined by race, social class, or geography; the need for teachers to learn new approaches to teaching, monitoring, and mentoring to adequately serve their students; and the need for standards of quality for new programs. On the other hand, the move to commercialize and digitize curriculum delivery is dismissed as an attempt to de-skill and get rid of teachers with little consideration toward the pedagogical impact. This viewpoint sees automation as a strategy for reducing the need for highly skilled tasks that are expensive to maintain; in the field of education teachers are highly skilled at educational tasks. When their tasks become automated then the need for teachers with those skills is reduced, thus the expectation of what is wanted from a teacher, a teachers' skills bank, is that one can get by with or pay less for teachers who are less skilled. The general caveat is to warn against addressing people as information processors or to redefine complex human issues such as trust as simply information.

The digital classroom gives rise to new teaching and learning styles that can be more flexible and adaptable, yet it raises issues of equity and access that are not fully understood. Curricular changes are extrapolated to the entire university level with the creation of virtual universities. Western Governors University (WGU) illustrates the move from a bricks and mortar to a clicks and mortar, virtual institution. WGU is a collaborative effort of eighteen western states to create a fundamentally online higher-education program. The WGU plan ensures that it be "market-oriented, independent, client-centered, degree-granting, accredited, competency-based, non-teaching, high quality, cost-effective, regional, and quickly initiated."

In general, commercialism and privatization are advocated as organizational mechanisms to address controversies around how best to improve educational efficiency, cater to pluralistic preferences, make institutions more accountable, and reduce government spending. The phrase school/business relationship can be misleading, since such partnerships encompass everything from genuine altruism to cynical exploitation of the youth market. For example, at the K–12 level, a school may receive computer equipment in exchange for electronic marketing to students; or a school may receive free pizza from a specific pizza franchise if students read so many books. At the university level, partnerships include university connections to science parks that impact the processes of invention, innovation, technology transfer, commercialization, and enterprise. Many universities encourage faculty entrepreneurship, provide support systems, and promote university-industry links. These changes in the university environment effected by the increasing roles of knowledge and technological innovation can lead to healthy economic benefits, but excessive commercialization may undercut the mission of public universities. Knowledge generation no longer in the public domain becomes owned by or proprietary to corporations and individuals connected to technology transfer license agreements. The ability to advance scientific knowledge can be restricted by access to proprietary knowledge.


Globalism can be examined from several angles. In a general sense, globalism can refer to the process in which events in distant locales make a difference in the lives of people in a local area. Global processes have heavily influenced changes in technology, changes in capital, and changes in the mobility of labor. No one theory of globalization that tries to account for its effects can capture the inherent ambiguity of the multitude of ongoing processes. Some theories of globalization say it has a homogenizing effect, resulting from the imposition of capitalist logic. Other theories say it creates heterogeneity by circulating goods, ideas, and culture, thus creating new hybrid cultures that emerge from processes of globalization, e.g., youth subcultures. Others claim that globalism is functionally equivalent to modernity, but is a more neutral term.

However, globalization can be construed as a cover word for what used to be called imperialism. This is a Marxist formulation, describing capitalism as having reached the imperialist stage, though rather than imposing its will through force and colonization, it does so through the force of advertising and commodification.

It is not a question of whether or not the global economy will happen, but a question of the global economy on whose terms. What is at stake is both how globalization is theorized and how technologies are used to better understand the complex interdependencies between commerce and education.


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Additional topics

Education - Free Encyclopedia Search EngineEducation Encyclopedia: Classroom Management - Creating a Learning Environment to Association for Science Education (ASE)