Free-trade agreements linking Australia to south-east Asia, Latin America and the European Union will help break our reliance on international students from China, but they could also pave the way for increased competition from foreign universities on local soil.
The new Trans-Pacific Partnership agreement, or TPP-11, signed in March will boost trade between Australia and 10 other signatories – Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam.
It is seen as the new gold standard of free-trade deals, which no longer focus primarily on goods but increasingly on services as well.
Negotiations are now under way for a similar agreement with the European Union, which EU Trade Commissioner Cecilia Malmstrom says would open up significant opportunities in public procurement and the service sector in particular.
As one of the country's biggest sources of export income, these agreements have enormous implications for the tertiary sector.
Some of the benefits are easy to see – two in particular are greater access to overseas students and smoother facilitation of international research projects.
On their own, the agreements won't necessarily lead to a shift in the number of international students studying in Australia, but they could dramatically change where they come from – alleviating concerns about over-representation of Chinese students in local classrooms.
Recognition of qualifications
Simplified visa requirements, government promotions of education in Australia and mutual recognition of qualifications in professions like law, accounting and engineering could see an influx of new students from areas like Latin America or parts of Asia that have traditionally been considered out of reach.
Similarly, a shared understanding on issues like salary provisions and working conditions, joint protection of intellectual property and investment rules would make it much easier than it currently is for researchers and university staff to collaborate across borders, and for universities to invest strategically abroad.
However, Australian universities will need to be proactive to actually take advantage of what these agreements offer – and if they don't, risk losing out to their overseas counterparts.
Just because FTAs exist doesn't mean businesses automatically reap their benefits.
Higher-education providers will need strategic managerial and organisational knowledge to know how to navigate their complex rules effectively.
A report on how Australian businesses have used existing FTAs to date, published by PwC in February, found that their impact was particularly high in merchandise trade, but only 35 per cent of services firms considered them as part of their export strategy. This compares to 90 per cent of EU organisations.
This would indicate that the services sector in Australia is significantly less developed in its approach to using FTAs effectively than it is in the EU, which would possibly put our sector on an uneven playing field if – or more likely, when – it becomes Australia's next FTA partner, depending on the success of governmental negotiations.
Increase in awareness
Thankfully, the attitude of Australian universities to FTAs has started to shift over the past few years.
When talk of a possible agreement with the EU first arrived, it seemed as if the higher education sector wasn't sufficiently concerned because it didn't see how such a deal could be relevant.
Since then, there has been a noticeable increase in awareness among vice-chancellors and in lobbying for the higher education sector to be represented in negotiations – though it is still far from comprehensive.
Just as Australian businesses will be looking to see how a potential FTA with the EU could benefit them, so will their European counterparts be on the hunt to make the most of new opportunities in Australia. This will include education providers already keen to launch new campuses on Australian soil.
The danger for Australia's higher education industry lies in underestimating just how much change could be around the corner, brought on both by Australia's existing FTAs as well as the plurilateral TPP-11 deal and future FTA deals such as that with the EU. If Australian universities don't tap into the opportunities effectively, they run a serious risk of losing their position and watching as international providers step in to fill the gap.
Source: Financial Review