Imagine you are Wal-Mart Stores Incorporated, 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 is to “dominate North America, then South America, then Europe and Asia,” according to David Glass, the executive committee chair of your board of directors.
There an impediment to your dream of opening one new store somewhere in the world every single day: some cities don’t want you. Or they will only accept you on their own terms, not yours. That means no rezoning to accommodate your big-box stores and oceanic parking lots. That means official community plans (OCPs) won’t be changed for you — those frustrating blueprints that designate areas for retail, housing, industry and parkland.
Use land already slated for retail, some cities say, even if you have to squish into a smaller store.
Playing Hard to Get
Now you have a trouble spot in Vancouver, the only major Canadian city without one of your stores. You’ve applied for rezoning to build a 14,000-square-metre store on Southeast Marine Drive. It’s shopping distance from a handful of diverse neighbourhoods, each with its own retail heart. But a vociferous coalition called Building Better Neighbourhoods is campaigning to oppose your rezoning application. Your store “would divert nearly $13 million in retail sales from local merchants and put an estimated 75 to 150 local stores out of business,” according to a petition circulated by the coalition.
Despite your assurances to the city’s media that your company does not put small stores out of business, you’re a tad worried about how things might go. Your developers have hired a consultant, Chuck Brook, to shepherd the application through Vancouver city hall. Twice recently, you have flown out Andrew Pelletier, your director of public relations, from Canadian headquarters in Mississauga.
Dressed in casual pants and an open-necked shirt, Pelletier walked up and down south Vancouver streets shaking hands with small merchants. He told them they have nothing to fear from Wal-Mart.
Rezoning is the Game
Pelletier also told the Vancouver media that opposition to Wal-Mart stores is rare these days. In fact, it was mostly a fad of the 1990s. Truth is, though, rezoning does not always go your way.
- Less than two years ago, the municipality of Surrey — part of metropolitan Vancouver — rejected your rezoning application largely because of concerns about traffic.
- On February 28, the Miramichi, New Brunswick, city council voted against rezoning residential land for a Wal-Mart.
- In Nelson, B.C., your plans to expand the smallish Wal-Mart on the city’s picturesque waterfront were rebuffed last summer because your proposed development did not conform to Nelson’s OCP.
- In December, the city council in Guelph, Ontario, turned down a proposal for a Wal-Mart that would have required changes to the town’s OCP.
So what is a corporation to do?
Think big. Think Free Trade Area of the Americas (FTAA). Think World Trade Organization (WTO). Think, “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. Relatively speaking rezoning is a mere trifle for a corporation that is expected to have annual sales in 2002 greater than the revenues of fifteen 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 your founder’s — Sam Walton — family almost the richest people on earth. They have a combined wealth of US$102.9-billion, according to Forbes magazine, which placed the five at numbers six through ten on this year’s list of the world’s billionaires.
Playing by New Rules
Across the ocean, in Geneva, Switzerland, WTO negotiators are meeting this month to discuss barriers to trade in the service sector. Included on the agenda are local bylaws that appear to favour small retailers over large ones.
The discussions are part of the ongoing expansion of the GATS, or General Agreement on Trade in Services. Canada has already signed this agreement, one of more than a dozen international trade deals administered by the WTO.
For the revamped GATS, negotiators will set limits on what all levels of government can do when they regulate retailing and other services. On the bargaining table are “restrictive regulations relating to zoning and operating hours,” according to the leaked minutes of an October WTO “working party” meeting.
Under potential new GATS rules, Vancouver and other municipalities would no longer have the final say about the locations of Wal-Marts and other big-box stores. Any city regulations that restrict where big-box stores can be built or limit their size could be challenged as barriers to trade, says Ellen Gould, an independent Vancouver researcher on trade agreements.
“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.
Harriet Permut, a senior policy analyst with the Union of B.C. Municipalities, says 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. “It’s like fighting a shadow. You don’t really know what would happen; it’s a potential threat.âe
Wal-Mart Plays Big
Wal-Mart, along with other major retailing firms, is reported to be a key player pushing the deregulatory agenda at the WTO. Here’s how “World Trade Agenda” — a subscriber newsletter published by a former WTO communications director — put it. “[B]ig 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 United States and Europe, retailers are “getting organized to ensure this sector gets attention this time around,” says the June 2000 newsletter.
Wal-Mart is a key adviser to the U.S. government on trade policy. The company is a member of the U.S. Industry Sector Advisory Committee (ISAC), a body that advises U.S. trade representative Robert Zoellick. ISAC bills itself as “the U.S. industry’s voice in international trade policy.”
Wal-Mart belongs to the ISAC wholesaling-and-retailing committee. That committee has already advised the U.S. government on WTO-administered agreements and the FTAA, according to a backgrounder put out by the U.S. Department of Commerce.
Wal-Mart is also “one of the strongest proponents of liberalized trade under the FTAA,” according to the Latin American Economic System (SELA), a regional intergovernmental organization of twenty-eight Latin American and Caribbean countries.
Wal-Mart wants the FTAA agreement to restrict a party from limiting “the number of service suppliers or operations,” SELA reports in a 2001 document titled FTAA Draft Document Comments. Wal-Mart also wants to the FTAA to restrict “competitive needs testing,” says the report.
Competitive-needs testing is not defined in any trade agreement, says Steven Shrybman, an Ottawa-based lawyer specializing in trade issues. It could refer to tests to determine if there is room in the marketplace for a proposed store, or if the market is already saturated. Its meaning would be open to interpretation by a FTAA dispute panel, says Shrybman. “Wal-Mart must have in mind the kind of constraints imposed on its ability to build in places due to land-use planning restrictions.”
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 clout of an FTAA agreement or the World Trade Organization to back you up.
Sarah Cox is a freelance writer and researcher based in Victoria, B.C. She is a regular contributor to The Georgia Straight, Vancouver’s weekly newsmagazine, where a longer version of this article first appeared. Her award-winning features about globalization and sweatshops also appeared in the Straight. She is currently writing first book.