Abstract Internationalisation and cross border education have a long tradition in higher education. What is relatively new is the focus quality by developing a highly innovative and adaptable workforce, and even newer - education seen as a trade industry in itself. New supranational governing bodies with their legal frameworks, like the World Bank, The International Monetary Fond (IMF), The Organisation for Economic Cooperation and Development (OECD) and World Trade Organisation (WTO) are increasingly playing an important role. Also regional trade agreements such as North America Free Trade Agreement (NAFTA) and the European Union (EU) are playing an important role. A common politically and ideologically element in all these institutions is the emphasis on liberalisation and free trade.Liberalization of schooling and education services has occured in many countries around the world. The production, evaluation and exchange of knowledge are increasingly important global economic activities, to the extent that knowledge may be becoming the world's most important and valuable trading commodity. Inside EU 70 per cent of economic activity are being in services, and education is an important service sector. At the same time, there is an opposition to free trade in services from trade unions, political partied, civil society groups and even some governments. The opposition against the GATS- agreement has in EU been close connected to the new Directive on services in the internal market (often referred to as the Bolkestein Directive) from December 2006. Even though the public education services were specifically excluded, the line drawn between public and private services seem to be unclear. The paper will focus on WTO's role as a governing body and in particularly the GATS (The General Agreement on Trade in Services) agreement from January 1. 1995. So far 47 of 148 WTO members have made commitments under GATS in education services. What is the core in the GATS-agreement? What is the connection to other supranational institutions and others legal frameworks? What were the intentions behind GATS? What is the negotiation situation after the breakdown in negotiations summer 2006?The presentation will discuss the GATS both as a challenge and a threat for particularly higher education as a trade commodity in the new, global, competitive economy.