Saturday, April 14, 2007

In Quebec, on Both Sides of the Fence

The old walled city of Quebec, site of the third Summit of the Americas, awoke to the sounds of hammers and power saws on Apr. 20, as workmen fashioned plywood and wire screens to protect the shop windows from the wrath of antiglobalization protestors. Workers took down the letters spelling out "McDonalds" over the global hamburger vendor -- one potential target. Shopkeepers along the popular Rue Ste. Jean even boarded up stores selling women's shoes, children's toys, and gourmet food items.

But Reine Biron, standing in front of her small hat shop Bibi, said such preparations were a waste. "I'm an independent shopkeeper, not affiliated with a big company," she insisted, one of her wool caps perched on her graying head. "I'm the person the demonstrators profess to be helping." Though she said she believed in free trade, Biron proudly noted that 80% of her hats were made in Canada. "When you spend a dollar, you are voting as well," she said.

Biron moved to the area in 1972 and helped renovate the once-seedy section, then avoided by tourists and Quebecois alike. Now, the neighborhood's trendiness and location -- just outside the 1.6-mile, 10-foot security fence erected for the Summit by police -- made it a likely troublespot. After all, Seattle's posh shopping districts took the brunt of the damage in the rioting of December, 1999, during a meeting of the World Trade Organization.

"DEMOCRACY?" Nearby at the security perimeter, provincial and city police carefully examined credentials, turning away many city residents lacking the big plastic, photo pass issued to officials and the press. In a peaceful country proud of its freedoms of speech and in a province renowned for its independent streak, the heavy security didn't go over well. "I just want to go home," said one woman, clutching a baguette. Knots of angry men kicked at the fence. "This is a democracy?" shouted one.

And sure enough, the Quebec summit unfolded with the protests and violence that have now become pretty routine for trade powwows. And you can bet the same labor rights and environmental protestors will be on hand for the next one as well.

But, officials insisted, this summit is the most democratic trade negotiation ever. As evidence, they note that its charter makes promoting democracy its top goal -- even higher than fostering trade -- and warns that reversion to dictatorships would constitute an "impediment" to participation by any of the 34 countries. Only Cuba, a Communist dictatorship, is excluded from the trade confab.

FULL DISCLOSURE. Also mentioned as issues at this Summit: gender equality, the rights of children, and the "civil, cultural, economic, political, and social rights of indigenous peoples." Can you get any more democratic than that? President Bush's National Security Adviser, Condoleeza Rice, said the democracy clause "is quite remarkable.... [It] clearly suggests that the hemisphere only benefits from democracies...and essentially says that you're really not a part of the club unless you're a democracy."

In addition, the 34 countries have agreed to release the entire 250-page text of their work-in-progress trade agreement, filled with the brackets that indicate disagreement by some of the parties, even though it isn't scheduled for completion until January, 2005. No multilateral trade negotiation has ever operated so openly.

But protesters at the "People's Summit of the Americas" rejected such moves as insufficient. They demanded that delegates from the official summit must come outside the security perimeter and meet in the open: "What's being threatened are our democratic rights, which will be put into the hands of the international corporations," said Tom Hansen, head of the Alliance for Responsible Trade, an anti-FTAA group that produced its own 65-page "fair trade" proposal.

STRIDENT ARGUMENTS. Other demands from the group include: no trade rules affecting water and land rights, forests, minerals, human rights, women's rights, animal welfare, food, social services, affirmative action, health, safety, energy, or education. Limit patent protection for medicines. Anti-FTAA groups are being asked to sign onto the effort.

Such strident arguments cheered the crowd beneath a massive tent holding thousands of activists at the People's Summit outside the fence. But the day's speeches left one question hanging: The leaders of the 34 democratic nations inside the fence were elected to represent their citizens. But who elected the protesters?

You might expect some small Latin American countries that depend on trade to be enthusiastic boosters of trade liberalization. Take Uruguay, a nation of 3.3 million that manages to be a net exporter of farm goods. In fact, as a member of the Cairns group of agricultural exporters, Uruguay often joins the U.S., Australia, Canada, and New Zealand in advocating lower barriers to food imports.

CAN'T COMPETE. Yet for Uruguay, fewer barriers to food exports have been a disaster, said Alberto Vilarreal, an intense, 45-year-old farmer from Colonia, near the River Platte. Today, four farmers in Uruguay go bankrupt each day, thanks to lowered trade barriers, even while exports of farm goods rise. The reasons: As import barriers have come down, exports of beef have increased, benefiting ranchers whose land holdings tend to be large. But horticultural farmers, whose individual holdings tend to be small, can't compete with vegetables from Argentina, fruit from Brazil, and even potatoes from far-away Canada.

So, as a few prosper, many more are struggling. In addition, some meat-packing companies have shuttered because ranchers switched to exporting live animals, helping to drive unemployment to 11% while the overall economy declined by 1.5% last year, according to official figures.

Similarly, Mexicans, who enjoy a 2.3% unemployment rate, an economic growth rate of 7%, and a healthy trade surplus within the hemisphere, ought to be anxious to expand the three-nation North American Free Trade Agreement to the south. But, says Marta A. Ojeda, executive director of the Coalition for Justice in the maquiladoras, the benefits of free trade aren't that evident along the U.S. Mexican border, even though wages at the border assembly plants are higher than average.

CARDBOARD SHACKS. As the stakes have climbed, Mexican companies have fought the labor movement even harder. Meanwhile, the Mexican central government has brought electricity and water services to the border, as once promised, but only to the industrial parks in order to attract new foreign investment. "Local governments don't have the money to provide services, so the workers are still living in cardboard shacks with no running water and no electricity," says Ojeda.

Ojeda, 43, spent 19 years working in maquiladoras supplying Johnson & Johnson and Sony Corp. She has been fighting with local manufacturers to stop giving new female hires pregnancy tests -- and excluding them when the tests are positive. She also wants diagnosis and treatment for workers with repetitive stress injuries, such as carpal tunnel syndrome, which is a big problem in the automotive plants. "When we complain to the U.S. corporations, they just say that the Mexican plants are subcontractors and they have no control over them," she says.

As long as disputes such as these persist, security fences around trade summits will be the norm, rather than the exception.

BusinessWeek trade correspondent Magnusson covered the event in Quebec
Edited by Douglas Harbrecht