Audio Transcript:

The economic crisis has forced many immigrants in Spain to sell cheap knock-off wares on the streets. This has caused problems at Mediterranean beach resorts. Despite immigration laws, one local official has set up free trade zones for the immigrants to sell their wares without police harassment in exchange for leaving the main part of town. The World's Gerry Hadden reports from Calafell, Spain.

MARCO WERMAN: The economic crisis in Europe continues to put strains on immigrants there, especially on illegal immigrants. In Spain many of them have taken to hawking cheap sunglasses or handbags and pirated DVDs. The sell from blankets on sidewalks so they can wrap everything up for a quick getaway. The problem has gotten so bad in some Mediterranean beach resorts that officials are flouting the law and setting up so-called ?free trade zones? for the sidewalk sellers. The World's Gerry Hadden reports from Calafell, Spain.

GERRY HADDEN: All summer long locals and tourists have witnessed a daily drama in this otherwise quiet village. The police chasing mainly Sub-Saharan immigrants through Calafell's narrow streets or along this beachside boardwalk. For a quick getaway, the immigrants gather up their knockoff Gucci bags and Ray Ban sunglasses in sheets, then bolt. This vendor wouldn't give his name.

SPEAKING ARABIC

HADDEN: He says everyday the cops would come and take our merchandise. You'd set up your sheet on the sidewalk only to have to start running. Sometimes the police would body block us, he says, knocking us to the ground as we fled. It was intolerable. Such scenes were hardly good for tourism and the illegal's sales cut into the profits of local stores. So, Calafell's mayor, Jordi Sanchez, took action by breaking the law himself. In exchange for leaving the main part of town, Sanchez set up a free trade zone for the immigrant. On this strip of boardwalk, a five-minute walk from downtown, some two dozen immigrants now hawk their wares without police harassment

SPEAKING SPANISH

HADDEN: Mayor Sanchez insists it's a temporary solution. It was the only viable way to resolve the conflict he says. Another way would be to detain and deport the illegal immigrants. But that's nearly impossible in Spain. The undocumented workers generally won't say where they're from and Spanish law only lets police hold them for a few weeks, then they're back on the street. Business owners like [PH] Luis Martine Del Saro are furious over the free trade zone. Del Saro owns a shop just around the corner. He sells the same things you can get on the sidewalk, beach bags and so on. But his cost more.

SPEAKING SPANISH

HADDEN: He says it's not right that they mayor allows these people without working papers to sell pirated things. And they don't pay fees or taxes. They just sell their fake stuff. If I were to start selling rip-off merchandise in my store, the cops would show up and who knows how big the fine would be. They might even close my store, he says. Store owners here recently staged a protest by selling their own merchandise on sheets at the beach right in front of the immigrants. They want tougher police controls. The controversy has divided townsfolk.

SPEAKING SPANISH

HADDEN: One Spanish man, [PH] Rafael Compaos, says these poor immigrants can't be blamed for their situation. They're just trying to survive, he says. Besides this business is all controlled by Mafias. They're the one making the real money. Meanwhile, saving money are the tourists.

SPEAKING SPANISH

HADDEN: A young woman named [PH] Jema browses the immigrant's products as the sun sets. She says she sides with local businesses, but can't resist a bargain. I know this stuff is all copied, she says, but the quality is good and much cheaper. Mayor Sanchez says he's well aware that his free trade zone is controversial. It was a protest of his own, he says, designed to pressure federal authorities to help. It appears to have worked. Just this week the Spanish government pledged to send hundreds more police to towns like Calafell to drive the illegal sidewalk sellers out once and for all. In return, Sanchez has pledged to close his free trade zone by September 1st. But the problem will likely just migrate elsewhere. The undocumented workers are still in Spain and they still need to eat. For The World, I'm Gerry Hadden, Calafell, Spain.