Stop fretting about Brussels and watch out for Gats 2000, advises Barbara Gunnell

It is comical to witness Tory press outrage at threats to sovereignty from across the Channel. When Brussels is not out- lawing British sausages and chocolate, they scream, then it is regimenting its soldiers or trying to impose European taxes. Thank God for Margaret Thatcher and the veto she won to protect Britain from European bullying!

The comic element in these regular "hands off Blighty" eruptions is that while the pantomime dames are noisily seeing off Johnny Foreigner, they appear not to have noticed that, behind their backs, the real villain is loading every last bit of sovereignty into a bag labelled "Gats". You want to leap from your seat and shout "Behind you!", while into the swag-bag go the rights to regulate telecommunications, financial services, inward investment, even health and education.

Gats - the General Agreement on Trade in Services - is a shadowy villain, an offspring of the Geneva-based World Trade Organisation. It is currently being negotiated clause by clause, sector by sector, under the umbrella name Gats 2000, although talks will continue way into 2002. The aim, over time, is to achieve "a progressively higher level of liberalisation" in areas that few of the protesters against global capitalism on the streets of Seattle last December even imagined. Had that meeting gone ahead, we might have learnt then of the WTO's plans to extend the rule of the market into the rapidly growing services sector.

It is easy to see why big business is interested. Watching traditional manufacturing profits fall, multinationals see large rewards to be made from trading in sectors that have historically been publicly regulated and financed. In Europe, for example, about 15 per cent of GDP is spent on health and education, mostly by governments - a prize worth chasing. Gats can reach the billions of dollars that other trade agreements can't.

The most enthusiastic liberalisers, such as the United States, believe that everything should be included - public health, education, the film industry, broadcasting, tourism, energy and water should all be subject to the market. If a service can be privatised, it should be, and any measures that discriminate against foreign service suppliers should be removed. Nothing is excluded, even areas of traditional public control. Pascal Lamy, the European Union trade commissioner, told Gats 2000 that he believed health and education were both "ripe for liberalisation". In Britain, Alan Milburn, the Secretary of State for Health, has already demonstrated his enthusiasm for encouraging the private sector into the health service with his historic "concordat" and extension of the private finance initiative.

The possibility of having Britain's traditional public schools run by Australian educational service providers might begin to make an impression on the Tory press but, so far, Gats 2000 has barely flickered on the radar. It is not entirely fanciful. In an early submission, Australia explicitly put down a marker that it has national companies interested in education. Like several of the Gats enthusiasts, Australia is already a net service exporter. In fact, the top 20 service exporters are all developed countries, a factor that Susan George and Ellen Gould, of the Paris-based Globalisation Observatory, believe augurs ill for the developing world. There is no evidence, they have written, that freeing up markets in services results in any increased financial flows to developing countries.

George and Gould are also concerned that the most basic question of all is never asked: is increasing trade liberalisation always the answer to a nation's problems? India's delegates have objected several times to the tendentious nature of the documentation provided by Gats staff. Why, India's delegation asked, was the secretariat's preliminary paper entitled "The Benefits of Deregulation and Liberalisation of Trade in Services", with no suggestion that there might also be drawbacks to examine? George and Gould conclude: "The current negotiations are running on secrecy, rushed deadlines and lack of communication to elected officials of the full implications of the talks."

Ignorance of Gats is exacerbated by the complexity of negotiations. At the outset, to encourage maximum participation, the WTO allowed countries to ring-fence certain areas - air-traffic control or health, for example - that they did not wish to put up for grabs. The belief was that, in the end, countries would include more and more areas. Meanwhile, each country is working with a different set of rules and objectives, and the only certainty is that they are all on a one-way path to "a progressively higher level of liberalisation".

Keeping negotiators on the straight and narrow is the business of lobby groups, such as the European Services Forum and the US Coalition of Service Industries, who are swift to chide if the pace slackens. Dean O'Hare, the chairman of the US Coalition of Service Industries, told a European Services Forum meeting last week: "Business operates at internet speed. US business is running out of patience with the pace of government decisions."

Barry Coates, the director of the World Development Movement, describes Gats 2000 as "ideologically driven" and calls on the WTO to halt negotiations now: "They want to extend the WTO to cover areas that have nothing to do with international trade and everything to do with extending the reach of the market and the power of multinational corporations."

Coates wants to see substantial changes in the structure of the WTO to give poorer countries a chance to resist the overwhelming strength and resources of the two giant trading blocs - the US and EU. "The WTO has to put poverty reduction and the environment at the core of all its agreements. The aims and the rules of the current system are the wrong ones," he says.

The multinationals are unlikely to let the worries of a few poorer countries stem their enthusiasm for mining this seam. But the rich world has much to lose, too. Unless we want every aspect of life - from the protection of hedgerows to the right to choose non-polluting sources of energy - to be decided by an anonymous and secretive trade panel, we must start telling our governments what parts of our economies we want to be off-limits in Gats 2000.

After Seattle, one cannot blame the WTO for attempting to keep out of the limelight. But we should be concerned that such an agreement is being negotiated with so little public scrutiny. Strangely, the Tory press is silent when it comes to a country's sovereign right to run services for public benefit rather than private profit.

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