According to a recent article in The NewStandard, international negotiators at the World Trade Organization (WTO) meeting in Hong Kong are considering trade rules that would allow giant retailers like Wal-Mart to void local zoning laws created to limit the size and location of land uses. The article suggests that the General Agreement on Trade and Services (GATS) might allow giant corporations to walk all over small towns. GATS has been adopted by at least 140 WTO member nations, including the U.S. GATS says that federal, state and local governments cannot restrict the size and operations of foreign service-sector corporations. If a community enacts such a provision, a foreign government can challenge these “barriers to trade” through a WTO dispute-resolution process. The US Congress signed onto GATS eleven years ago, agreeing to make the retail sector comply with GATS rules, the NewStandard says. But negotiators at GATS are trying to impose further restrictions on the right of governments to dictate the terms under which corporations can do business within their borders. The group Public Citizen has released a report suggesting that GATS could be used to undermine state and local land-use regulations. The NewStandard quotes Sprawl-Busters founder Al Norman as saying, “Zoning is one of the last bastions of local control. Whether people want big boxes or don’t want them, they certainly don’t want some sort of international trade agreement to step in between them and their right to control land use. To me, it’s unconstitutional for a trade agreement to take away that statutory power.” Zoning laws at the local level are established by state enabling laws, and it would be an interesting legal fight to see a corporation try to overturn such laws by invoking the GATS. Such a move would create an enormous political backlash, if not a legal one as well. A spokesman for the Retail Industry Leaders Association told The NewStandard, “We certainly oppose retail restrictions, size restrictions here, domestically… (but) We have no intention of working through [the] WTO to do any kind of backdoor preemption,” he added. Yet in 2002, this group and Wal-Mart complained to the US Trade Representative about regulations in some countries that limited where and how large they could build stores.
The NewStandard story quotes Sprawl-Busters as noting that with or without GATS, many developers already have the upper hand, because land use in America is an insider’s game of real estate and government collusion. “Local officials either are in the hands of the developers or don’t know what their powers are to stop developers,” Sprawl-Busters said.
If GATS tries to step all over the local police powers of U.S. cities and towns, there will be a howl from the left and the right that will make the current “eminent domain” controversy look like a tempest.