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Big Box Backlash: The Stealth Campaign at the World Trade Organization to Preempt Local Control Over Land Use

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As communities across the United States and elsewhere are increasingly successful in their effort to limit “big box” store expansion and destructive retail practices through transparent and accountable measures at the local level, Wal-Mart and other retailers have pursued rules at the World Trade Organization (WTO) which threaten to preempt, or at the very least chill, these local laws. These rules are part of the General Agreement on Trade in Services (GATS).

Wal-Mart Revealed

“Countries also should be encouraged to remove any size limitations on individual stores, numeric limits on the number of stores in country and geographic limitations on store locations in the country.”

Wal-Mart Executive Vice President to USTR Robert Zoellick, May 1, 2002

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 World Trade Organization (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.

For More Information

Mega-Retailers Lobbying Documents

Take Action

Trade negotiators are now working behind closed doors to add more service sectors and expand the scope of the GATS rules even further. This WTO expansion of power means a group of trade officials, rather than democratically elected policy-makers, will be making decisions about local laws that affect our communities.

  • Write to your governor and demand that your state be “carved out” from any GATS commitments implicating zoning and land use laws (including retail distribution, wholesale distribution, hotel and restaurant sectors). Ask that your state be carved out from future GATS commitments as well.
  • Contact your Member of Congress (if you don’t know who that is, click here), and request that WTO GATS commitments be clarified to exempt existing and future zoning and land use laws.

For further information, please contact  Saerom Park at (202) 454-5127.