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Business Envoy March 2020 Banner image

New opportunities for Australian education services exports under IA-CEPA, by Simon Lacey, Senior Lecturer, Institute for International Trade, University of Adelaide

As a skills-based economy, Australia has an established track record of exporting its world-class education services, both in the region and further afield. In fact, education services are Australia’s biggest category of services exports, followed by tourism.

Higher education is one of the fastest growing education exports, recording impressive growth of 17 per cent in 2018, but technical and vocational education and training (TVET) is also an important export category for Australia.

Education services exports take various forms, including foreign students attending schools, universities and vocational training institutions in Australia, as well as by these same institutions establishing campuses in overseas markets or providing training, courses and certification to students where they live and work.

Yet another way in which Australia exports education services is by providing online or distance learning programs or correspondence courses to participants living overseas. Finally, many Australian teachers, professors and trainers also travel to markets abroad and provide teaching and training to overseas students directly.

Australia is a favoured destination for young Indonesians looking to kick-start their careers, with nearly 21,000 enrolments from Indonesia at Australian higher education institutions in 2018. In 2018, we exported $899 million worth of travel‑related education services to Indonesia, and there is considerable scope for further growth.

The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) recognises this potential, by including a skills development package that promotes market access opportunities for Australian vocational education and training providers, as well as strengthening people-to-people links.

Following the entry into force of IA-CEPA, Australian education providers will be able to establish majority-owned work training institutions in Indonesia. The IA-CEPA skills package also includes a reciprocal skills exchange program, a workplace skills training program in key sectors (such as financial and insurance services, mining, engineering, information media and telecommunications services) and an expanded work and holiday visa program.

In the area of vocational education, where Australia is particularly well placed to export its expertise thanks to a long history of high-quality vocational training including TAFE, IA-CEPA provides opportunities for Australian work training providers in Indonesia by ensuring that the requirements for Australian trainers are accepted in Indonesia.

In addition to this, Indonesia guarantees Australian providers can offer the full range of Australian Qualifications Framework qualifications, and Indonesian Qualification Framework qualifications from levels 1 to 5 in the areas of technical and engineering, business administration, languages, tourism, management, information technology, art and agriculture.

Indonesia is a market that represents significant potential for Australian education services exporters, given the complementarities that are in play between these two trading partners.

Australia can expect improved market access for Australian vocational training and education providers and stronger business links in key sectors thanks to IA-CEPA.

This is in line with the objectives of the current Indonesian Government, which has recognised that the country must address its considerable skills gap, and that foreign technical and vocational education and training providers will play an important part in doing so.

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