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GATS and Land Use

In 1994, the United States committed retail and wholesale distribution, as well as the hotel and restaurant sectors, to the terms of the GATS, one of 17 Uruguay Round agreements enforced by the Geneva-based WTO. The GATS expansive "market access" rules are geared toward facilitating the entry of foreign service providers into the U.S. market by incorporation or acquisition of U.S. firms. These GATS rules forbid limits on the number of services suppliers, as well as measures that would reduce the value of a service transaction or limit the number of employees. Policies containing economic needs tests, like that in the city of Los Angeles for very large retail operations, are explicitly forbidden.

Unless the United States takes action to fix this problem in the current round of negotiations, local governments could see challenges to state and local land use laws brought before WTO tribunals, which are empowered to authorize trade sanctions against countries that refuse to conform their domestic policies to WTO dictates. Across the country, state and local officials are working to put laws in place to protect their communities, their environment, their wage base and tax dollars by putting land use limits on "big box" retailers, as well as retail chains and other development projects they deem destructive to the community or the environment or out of step with local needs and planning.

Among the local laws threatened by GATS rules are those that impose size and height restrictions on big box stores; limits on hours of operation; economic needs tests before stores can be approved; and limits on development to protect the environment or protect historic and cultural sites.


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