Anyone still unclear about why the police are constructing a  modern-day Bastille around Quebec
     City in preparation for the  unveiling of the Free Trade Area of the Americas should take a look  at a
     case being heard by the B.C. Supreme Court. In 1991,  Metalclad, a U.S. waste management
     company, bought a closed- down toxic treatment facility in Guadalcazar, Mexico. The company 
     wanted to build a huge hazardous waste dump and promised to  clean up the mess left behind by
     the previous owners. But in the  years that followed, they expanded operations without seeking local 
     approval, earning little good will in Guadalcazar. 

     Residents lost trust that Metalclad was serious about cleaning  up, feared continued groundwater
     contamination, and eventually  decided that the foreign company was not welcome. 

     In 1995, when the landfill was ready to open, the town and state  intervened with what legislative
     powers they had available: The city  denied Metalclad a building permit and the state declared that
     the  area around the site was part of an ecological reserve. 

     By this point, NAFTA -- including its controversial "Chapter 11"  clause, which allows investors to
     sue governments -- was in full  effect. So Metalclad launched a Chapter 11 challenge, claiming 
     Mexico was "expropriating" its investment. The complaint was  heard last August in Washington by a
     three-person arbitration  panel. Metalclad asked for $90-million (U.S.), and was awarded 
     $16.7-million. 

     Using a rare third-party appeal mechanism, Mexico chose to  challenge the ruling before the B.C.
     Supreme Court. 

     The Metalclad case is a vivid illustration of what critics mean  when they charge that free-trade deals
     amount to a "bill of rights for  multinational corporations." Metalclad has successfully played the 
     victim, oppressed by what NAFTA calls "intervention" and what  used to be called "democracy." 

     As the Metalclad case shows, sometimes democracy breaks out  when you least expect it. Maybe
     it's in a sleepy town, or a  complacent city, where residents suddenly decide that their  politicians
     haven't done their jobs and step in to intervene.  Community groups form, council meetings are
     stormed. And  sometimes there is a victory: A hazardous mine never gets built, a  plan to privatize
     the local water system is scuttled, a garbage dump  (such as the one planned for Kirkland Lake
     north of Toronto) is  blocked. 

     Frequently, this community intervention happens late in the  game and earlier decisions are
     reversed. These outbreaks of  grassroots intervention are messy, inconvenient and difficult to 
     predict -- but democracy, despite the best laid plans, sometimes  bursts out of council meetings and
     closed-door committees. 

     It is precisely this kind of democracy that the Metalclad panel  deemed "arbitrary." Under so-called
     free trade, governments are  losing their ability to be responsive to constituents, to learn from 
     mistakes, and to correct them before it's too late. Metalclad's  position is that the federal government
     should simply have ignored  the local objections. There's no doubt that, from an investor 
     perspective, it's always easier to negotiate with one level of  government than with three. 

     The catch is that our democracies don't work that way: Issues  such as waste disposal cut across
     levels of government, affecting  not just trade but drinking water, health, ecology, and tourism. 
     Furthermore, it is in local communities where the real impacts of  free-trade policies are felt most
     acutely. 

     Cities are asked to absorb the people pushed off their land by  industrial agriculture, or forced to
     leave their provinces due to cuts  in federal employment programs. Cities and towns have to find 
     shelter for those made homeless by deregulated rental markets,  and municipalities have to deal
     with the mess of failed water  privatization experiments -- all with an eroded tax base. 

     There is a move among many local politicians to demand  increased powers in response to this
     offloading. For instance, citing  the Metalclad ruling, Vancouver City Council passed a resolution 
     last month petitioning "the federal government to refuse to sign any  new trade and investment
     agreements, such as . . . the Free Trade  Area of the Americas, that include investor-state
     provisions similar  to the ones included in NAFTA." And on Monday, the mayors of  Canada's
     largest cities launched a campaign for greater  constitutional powers. "[Cities] are listed in the
     constitution of the  late 1800s between saloons and asylums and that's where we get  our power, so
     we can be offloaded [and] downloaded," explained  Joanne Monaghan, president of the Federation
     of Canadian  Municipalities. 

     Cities and towns need decision-making powers commensurate  to their increased responsibilities,
     or they will simply be turned into  passive dumping grounds for the toxic fallout of free trade. 
     Sometimes, as in Guadalcazar, the dumping is plain to see. 

     Most of the time it is better hidden.

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