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Georgia Strait
Vancouver's News and Entertainment Weekly
March 7  14, 2002

New Gats Rules are Wal-Mart Welcome Mat
By Sarah Cox
Imagine you are Wal-Mart Stores Inc., the world's biggest company. You
have more economic clout than most nations. You have the largest
computer system on the planet, next to the U.S. government. You have the
world's most sophisticated and efficient system for getting goods to
stores. You have almost 200 outlets in Canada, 533 in Mexico, and 3,240
in the United States. Your goal, according to David Glass, the executive
committee chair of your board of directors, is to "dominate North
America, then South America, then Europe and Asia".
There is just one impediment to your dream of opening one new store
somewhere in the world every single day: some municipalities don't want
you. Or they will only accept you on their own terms, not yours. They
don't wish to accommodate your big-box stores and parking lots by
changing zoning or official community plansblueprints that designate
areas for retail, housing, industry, and parkland. They tell you to
build in an area already slated for retail, even if you have to
construct a smaller store.
Now you've got a trouble spot in Vancouver, the only major Canadian city
without a Wal-Mart. You've applied for rezoning to build a
150,000-square-foot Wal-Mart on Southeast Marine Drive, on the former
site of the Dueck auto dealership. But a vociferous coalition called
Building Better Neighbourhoods which includes the Burrardview
Neighbourhood Association, Better Environmentally Sound Transportation,
the Society Promoting Environmental Conservation, and the Kensington
Cedar Cottage City Plan committee has since February gathered more than
a thousand signatures on a petition to oppose your rezoning application.
The petition says your proposed South Vancouver store "would divert
nearly $13 million in retail sales from local merchants and put an
estimated 75 to 150 local stores out of business."
Despite your assurances to the media that most Vancouverites want a
Wal-Mart, you're a tad worried. Your Canadian developer hired consultant
Chuck Brook to shepherd your rezoning application through city hall.
(Brook, a former city planner, organized a fundraising party for
councillor Gordon Price's 1999 reelection campaign and has overseen
several rezoning applications to city hall.) Andrew Pelletier, your
Canadian director of public relations, flew out from Wal-Mart Canada's
head office in Mississauga, Ontario, in February to shake hands with
South Vancouver merchants and reassure them that Wal-Mart will not take
away their business. Even so, members of the Mid-Main Business
Association are so concerned that they are circulating the petition to
their customers, according to Anne Roberts, a spokesperson for Building
Better Neighbourhoods.
Rezoning doesn't always go your way. The Miramichi, New Brunswick, city
council voted February 28 against rezoning residential land for a
Wal-Mart, even though 11,000 people signed a petition asking the
retailer to come to town. In Nelson, B.C., your plans to expand the
smallish Wal-Mart on the city's picturesque waterfront were rejected
last summer by city council because your proposed development did not
conform to the city's official community plan. You had long, messy
rezoning fights in Courtenay on Vancouver Island and in Whitehorse. In
the end, you won in both those communities, and the two stores opened
late last year, but you haven't been as lucky in other Canadian locales.

Surrey council rejected your rezoning application in 2000 after
residents argued that a Wal-Mart would cause an unacceptable increase in
traffic and detract from their neighbourhoods. In December 2001, city
council in Guelph, Ontario, rejected a proposal for a large-scale
Wal-Mart that would have required changes to Guelph's official city
plan. It was the third Guelph city council to vote on your proposal for
a big-box store. That rezoning battle has dragged on for seven years and
will continue before the Ontario Municipal Board, an adjudication body
that will have the final say.
In the past three years, you have had rezoning woes in at least six
communities in Ontario alone, according to Patti Brook, executive
director of the Uptown Waterloo Business Improvement Association. Brook
says the association, along with the city of Waterloo, is very concerned
about "the impact on the businesses of uptown Waterloo" that your
proposed development on the city's outskirts will have. Several years
ago, the City of Waterloo even refused to provide servicing for the site
you selected in the adjacent township of Woolwich, smack on the city's
border.
So what is a corporation to do? Think big. Think World Trade
Organization. Why not change the rules?
Imagine if you didn't have to go through all these rezoning hassles. For
even though you don't much like to discuss them, they are a thorn in
your bottom line. It's a mere trifle for a corporation that is expected
to have annual sales in 2002 greater than the revenues of 15 of Canada's
largest companies put together, including Royal Bank, CIBC, and
TransCanada Pipelines. But it does take away from the profits that
helped make five members of Wal-Mart founder Sam Walton's family almost
the richest people on Earth, with a combined wealth of US$102.9 billion,
according to Forbes magazine, which placed the five at numbers 6 through
10 on this year's list of the world's billionaires.
Spin ahead to March 12. In Geneva, Switzerland, World Trade Organization
negotiators will meet to discuss which "domestic regulations", such as
city zoning bylaws, are barriers to trade in the service sector. The
discussions are part of the expansion of the GATS, or General Agreement
on Trade in Services. The GATS, one of the dozens of international trade
agreements administered by the WTO, has already been signed by Canada.
WTO negotiators have a mandate to come up with "disciplines", or limits,
on what all levels of government can do when they regulate retailing and
other services. On the bargaining table, according to the leaked minutes
of an October WTO "working party" meeting, are "restrictive regulations
relating to zoning and operating hours."
Behind all that trade lexicon is the following message: under potential
new GATS rules, Vancouver and other municipalities may no longer have
the final say about whether or not to allow Wal-Marts and other big-box
stores. City regulations that restrict where big-box stores can be
built, limit their size, or control how long they stay open could be
challenged as barriers to trade, according to Ellen Gould, an
independent Vancouver researcher on trade agreements.
If a WTO trade-dispute panel decided that these regulations were
unnecessarily "burdensome", they would have to be watered down or
eliminated, Gould says. For example, under the proposed new GATS rules,
she says, Surrey council would have to accept Wal-Mart's proposals to
counter increased neighbourhood traffic through measures such as
landscaping and changes to access roads. "If this goes through, citizen
action at the local level to oppose inappropriate development will be
irrelevant," says Gould, who wrote a primer on international trade
agreements last May for the Union of B.C. Municipalities and who is on
contract with Georgetown University.
B.C. municipalities have already expressed concern that the expansion of
the GATS would jeopardize the autonomy of local governments. In 2000,
Vancouver city council and the Union of B.C. Municipalities both passed
resolutions asking for Canada to obtain a permanent exemption from the
GATS that would limit its application to areas of federal jurisdiction.
Harriet Permut, a senior policy analyst for the UBCM, says that
municipalities across Canada are worried about the potential scope the
revamped GATS will have when negotiations among the WTO's 144 members
are concluded. Only a challenge before a WTO trade-dispute panel would
prove one way or another if a municipality like Vancouver could be
required to change zoning regulations, Permut says. "It's like fighting
a shadow. You don't really know what would happen; it's a potential
threat."
Canada has asked that any new GATS "disciplines" on domestic regulation
apply only at the national level. "But other countries just laugh at
this," Gould says, because most aren't structured like Canada, with a
division of power between a federal government and provinces. The GATS
automatically covers every level of government. "So the federal
government has got us into a real mess."
Along with other major retailing firms, Wal-Mart is reported to be a key
player pushing the deregulatory agenda at the WTO. One of the priorities
of the current GATS round is the "so-far neglected distribution services
sector", according to a subscriber newsletter put out by a former WTO
communications director. The June 2000 newsletter states that "big name
chains like Wal-Mart, Carrefour, Marks and Spencer and Ahold have global
strategies for which market access conditions and domestic regulatory
restraints in new markets are crucial [issues]." In the U.S. and Europe,
the newsletter says, retailers are "getting organized to ensure this
sector gets attention this time around."
Wal-Mart is also a key adviser to the U.S. government on trade policy.
The company is a member of the U.S. Industry Sector Advisory Committee,
a body that advises U.S. trade representative Robert Zoellick.
The ISAC wholesaling-and-retailing committee, which Wal-Mart belongs to,
has already advised the U.S. government on WTO-administered
agreementsand the Free Trade Area of the Americas, according to a
backgrounder put out by the U.S. Department of Commerce.
The Latin American Economic System (SELA), a regional intergovernmental
organization of 28 Latin American and Caribbean countries, notes in a
report that Wal-Mart is "one of the strongest proponents of liberalized
trade under the FTAA". SELA also says that Wal-Mart seeks an FTAA
agreement that would, among other things, restrict a party (e.g., the
municipality of Vancouver) from limiting "the number of service
suppliers or operations".
The outcome of Wal-Mart's Vancouver rezoning application hinges largely
on a retail-impact study requested by the city. If the study, expected
to be completed by city consultants in May, shows that the proposed
Wal-Mart will have a detrimental impact on other merchants and shopping
areas, city council could find itself in a dilemma.
Community Vision plans for Sunset, Dunbar, and Kensington-Cedar
Cottage, which form part of Vancouver's City Plan, all contain clauses
that restrict big-box stores. The Sunset plan, approved by council on
January 15 this year, states that big-box outlets "will not be allowed
to locate where they will harm the economic health of the Fraser and
Main shopping areas". The Dunbar and Kensington-Cedar Cottage plans,
approved by council in 1998, state that big-box stores "close enough to
threaten the economic health of the local shopping areas" should notbe
allowed.
Even Wal-Mart's own studies show that the retailing giant has a
detrimental impact on other merchants. The Courtenay store will "have an
adverse impact on some retailers" and "some level of sales transfer and
store closure may be expected," according to a study paid for by
Wal-Mart's Canadian developers, First Professional Management Inc., the
company that has built almost all of Wal-Mart's new Canadian stores. (A
retail-impact study commissioned by Wal-Mart's Courtenay opponents
concluded that almost $18 million annually would be transferred to
Wal-Mart from other retailers.)
In Cranbrook, a more detailed study, also paid for by First
Professional, showed that the city's clothing stores were expected to
lose 27 percent of their business, or $6.6. million a year, to Wal-Mart.
Furniture and hardware stores were expected to lose 20 percent of their
business, or $5.2 million, to Wal-Mart, and the city's computer and
electronics stores were expected to lose 25 percent, or $1.7 million a
year. Zellers was expected to lose $12 million annually from its two
stores to Wal-Mart, according to the study conducted by Vancouver-based
Thomas Consultants Ltd.
Jim Simmons, a Victoria-based retailing consultant and academic who has
analyzed Wal-Mart's Canadian operations, says that retail sales have
shown very little growth over the past 10 years in Canada in general
and in Vancouver in particular. Simmons, who does not oppose
Wal-Mart's rezoning application and shops at Wal-Mart himself, says most
of the proposed Wal-Mart's sales will come from other merchants. "At the
scale at which Wal-Mart is operating, retailing is a zero-sum game,"
says Simmons, the author of several studies on Wal-Mart published by the
Centre for the Study of Commercial Activity at Ryerson Polytechnic
University.
Imagine you are Wal-Mart. If you don't get rezoning in Vancouver this
time around, you can always try again. And next time, you could have the
World Trade Organization on your side.


Eye, Toronto's Weekly Newspaper
http://www.eye.net/eye/issue/issue_02.07.02/news/citystate.html