Maquiladoras Research Paper

The Maquiladoras
Abstract
The research presented here examines the history, the pros and cons, and the future of maquiladoras along the United States and Mexico border. If you have ever had the opportunity to travel across the border it only takes a moment to see the maquiladoras flourishing in the Mexican border towns. Having had the opportunity on several occasions to take high school students on mission’s trips to work in orphanages in these border towns makes this subject of special interest to me.
Introduction
The maquiladoras were zones established by the Mexican government in order to attract manufacturing to the border areas with the United States. Typically, maquiladoras are foreign-owned, controlled or subcontracted manufacturing
government in 1964. The “Bracero Program” had allowed Mexican agricultural workers to work legally in the United States as guests on a seasonal basis from 1942 to 1964. (Massey and Liang, page 199) After the end of the “Bracero Program” the Mexican government found it necessary to move into action in order to alleviate the rising unemployment burden along the border. The result of their action became the beginning of the Maquiladoras Program also known as the Border Industrialization Program. The Border Industrialization Program was a major part of the Program Nacional Fronterizo (PRONAF). (Brescia and Raat) The Maquiladoras Program allowed duty-free, importing of raw materials, equipment and supplies to be shipped into Mexico as long as 100 percent of the products which were assembled there were exported. Once exported, the assembled products were only subject to the value added duty or tariffs upon reentry into the United States.
These maquiladoras were set up much like the Export Processing Zones (EPZ) already established in Asia. Manufacturing facilities set up in the EPZ’s are normally companies from foreign nations. The EPZ’s are established outside of the normal customs regulations in the host country allowing for a definite financial advantage. Since these manufacturing plants were leased by foreign companies and
In October 1972 the restriction was lifted which limited the distance from the border for the creation of maquiladoras and then in 1973 the restriction of partial ownership was also lifted so now 100 percent of the maquiladoras could be owned by foreigners. (Resolución General Número 1)
Perhaps the biggest change for the maquiladoras came from the North American Free Trade Agreement (NAFTA) signed by Canada, Mexico, and the United States in 1994. Following the signing of the agreement the maquiladoras plants soared. There is still some contention as to whether the growth following the signing of NAFTA had anything to with the agreement or whether in fact the growth was simply a continuation of the growth already in progress. Regardless of the reason for the continued growth of the maquiladoras there is no doubt that they are an important part of Mexico’s exports. The maquiladoras represented between 40 and 50 percent of Mexican exports in the early 1990’s.