MAQUILADORAS AND THE NAFTA'S IMPACT:
Introduction
In this paper I will discuss the history and practices of the Maquiladora industry. I will discuss its background, its problems, the benefits it offers to United States companies, and the impact the NAFTA has and will have on the industry. In addition, I will make a suggestion on a possible strategy the Maquiladoras can adopt in order to address the challenges brought on by the NAFTA, to ensure it remains a strong force in the future.
Background
Mexican agricultural workers had been granted temporary work visas allowing them to work in the United States' agricultural industries through a program called the Bracero Program until 1965 when this program was terminated. As a result of this termination, the unemployment rate had exceeded 70% in certain border cities. In May of 1965 the Border Industrialization Program was established as a replacement for the Bracero program. It was later renamed the Maquiladora Program. The program was established by the Mexican government to provide employment for Mexico's rapidly growing population along its border with the United States. This Program was utilized to keep Mexicans from entering the United States. The idea was that Mexican workers would be kept on the Mexican side of the border if they were given factory jobs on the Mexican side. The Maquiladora program also wanted to attract foreign manufacturing facilities, technology, and know-how by giving a permanent tax holiday to manufacturing companies that would set up "twin plants" on the Mexican side of the border.
In the beginning of the program, all foreign-owned operations had to be located within a 20-kilometer strip along the US-Mexican border. Since 1972 they can be located anywhere in Mexico. In 1996 there were around 2,500 Maquiladoras - 35% of them were located in the interior states of Mexico. Last year there were over 3,000 and more and more of these operations are being located outside of the border regions. Each of Mexico's 31 states has at least one Maquiladora.
What is a Maquiladora?
Maquiladoras, also referred to as "in bond" or "twin" plants, are allowed to temporarily import into Mexico (free of tax) machinery, equipment, replacement parts, raw materials, and just about anything that was used in the assembly or manufacture of semi-finished or finished products...
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...on between the non-Maquiladora and Maquiladora industries I feel the inefficient producers will be wiped out. Therefor, Maquiladora employees will need better training, education, incentives as well improved working conditions and higher wages. Operations will also have to be streamlined in order to reap the benefits of economies of scale and scope.
In addition, Mexicans as well as US citizens will start to demand more accountability from the Mexican government and the Maquiladora industry. They need to be more responsible for their actions. What will the U.S. corporations do when human rights activists and environmentalists start lobbying and protesting on their US sites? Do they want to risk losing their shareholders to this type of negative attention?
References
Benitez, Gerardo, Latin American Perspectives: The Maquiladora Program Its Challenges Ahead, THE WHARTON JOURNAL, December 11, 1995.
Clifford, Frank and Mary Beth Sheridan, Borderline Efforts on Pollution, THE LOS ANGELES TIMES, June 30, 1997, 1.
Naumann, Ann K. and Mireille Hutchinson, The Integration of Women into the Mexican Labor Force Since NAFTA THE AMERICAN BEHAVIORAL SCIENTIST, June/July 1997, 950-956.
All walks of life are presented, from prevailing businessmen of white-collar status, to those of the working class and labor industry, as well as individuals who deal in the black market of smuggling illegal immigrants across the border into the U.S. Hellman’s work explores the subject of Mexico’s economic situation in the 1990s. NAFTA (North American Free Trade Agreement) closely tied the United States and Mexico during this period, as well as similar policies such as GATT (General Agreement on Tariffs and Trade) that were also created. These issues pertaining to economic policies between the two nations, Mexico and the United States are seen highlighted throughout her work.
Mignolo, W. D. (2005). The Idea of Latin America (pp. 1-94). Malden, MA: Blackwell Publishing.
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