Hegemonic Exceptionalism and Legitimating Bet‐Hedging: paradoxes and lessons from the US and Japanese approaches to education services under the GATS

In this paper we consider the negotiating positions adopted by the US and Japan for the liberalisation of trade in educational services under the General Agreement on Trade in Services (GATS). We argue that the US adopts a position of hegemon and freerider in the development of a liberalisation regime in education. The aggressive character of the US position is profoundly influenced by: (1) a strong federal government level faith in service liberalisation; (2) high levels of domestic privatisation in the fields of higher education, training, testing and evaluation; (3) active lobbying by educational services providers. Nonetheless, the US is cautious about allowing foreign competition into domestic education markets. This stems in part from active resistance of the public education sector; and in part because of the delicate jurisdictional questions it would raise given the constitutional right of states to control educational policy. Ironically, US reticence also seems to be related to the relatively high levels of private educational expenditures in the US. In contrast, the Japanese government's approach is motivated primarily by bet‐hedging and legitimation concerns. Japan is not a net‐exporter of educational services and cannot be said to have comparative advantage in this field. However, three things seem to be influencing what might be seen as Japan's surprising decision to join the group of only four (World Trade Organization)WTO member nations who have submitted negotiating proposals for trade in educational services. First, the Japanese are strongly interested in the expansion of trade in other service areas, and may be willing to negotiate in education in order to further negotiations in these other areas. Secondly, Japan's decade‐long economic crisis has contributed to an important policy shift in the government's plans for higher education. Questions about the relevance and competitiveness of Japanese higher education have recently led the Japanese government to commit itself to this sector's ‘internationalisation’. To this end the government is also considering legislation that allows for the accreditation of 282 K. Mundy & M. Iga foreign higher education within Japan. Nonetheless, the Japanese government's negotiating proposal on trade in educational services is much more tentative than that presented by the European Union (EU) and New Zealand, for example. Japan places unique emphasis on the importance of regulatory control mechanisms for foreign service providers. As in the US, at least some part of the Japanese reticence seems to be driven by relatively high levels of private educational expenditure in the country. This paper is organised as follows. In Sections I‐V we briefly trace the history of the WTO, the GATS, and the inclusion of educational services in the GATS. Here we emphasise the strong role played by the US in the inclusion of services in international trade negotiations, and its part in the collapse of ‘embedded liberalism’ as a foundation for a multilateral trade regime. We also look briefly at the contentious aspects of the current round of negotiations in the education sector and describe their current state of play. In Sections VI and VII, we look more closely at the political economy of the negotiating positions adopted by the US and by Japan. We situate the negotiating approaches of these two countries within a comparative analysis of their relative share of current trade in educational services. In our concluding section, we begin to answer two questions. First, what theoretical framework best explains the content and direction of the American and Japanese negotiating frameworks? Second, what can the negotiating positions of these two important WTO members tell us about the overall direction and likely outcomes of the Doho round of negotiations on educational services?