Maquiladora

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A maquiladora or maquila is a factory that imports materials and equipment on a duty-free and tariff-free basis for assembly or manufacturing and then re-exports the assembled product, usually back to the originating country.

"Maquiladora" is primarily used to refer to factories in Mexican towns along the United States–Mexico border, but increasingly is used to refer to factories all over Latin America. Maquiladora factories encompass a variety of industries including electronics, transportation, textile, and machinery, among others. Maquiladoras may be 100% foreign-owned (usually by U.S. companies) in most countries. The use of maquiladoras is an example of offshoring. Other countries such as Japan, Germany, and Korea have maquiladoras as well, but the majority of them are located in Mexico and are associated with United States' companies.^[1]

The term "maquiladora", in the Spanish language, refers to the practice of millers charging a "maquila", or "miller's portion" for processing other people's grain.^[2]

Contents 1 Growth and Development 2 Border Industrialization Program 3 NAFTA 4 Controversies and Concerns 4.1 Gender 4.2 Low Wages, Long Hours 5 Environmental Concerns 6 Maquiladoras in Popular Culture 7 See also 8 External links 8.1 Footnotes 8.2 Resources

[edit] Growth and Development

From the initiation of maquiladoras in the 1960s, the industry rapidly expanded both geographically and economically and by 1985, had become Mexico’s second largest source of income from foreign exports, behind oil.^[3] Since 1973, maquiladoras have also accounted for nearly half of Mexico’s export assembly.^[4] Between 1995 and 2000, exports of assembled products in Mexico tripled, and the rate of the industry’s growth amounted to about one new factory per day.^[5] By the late twentieth century, the industry accounted for approximately 25 percent of Mexico’s gross domestic product, and 17 percent of total Mexican employment.^[6] However, profits generated from maquiladoras are typically sent back to the United States, or other investor-based countries, and therefore, maquiladoras do not promote direct economic development within Mexico.

Since globalization has contributed to the competition and advent of low-cost offshore assembly in places like Taiwan, China, and other countries in Central America, maquiladoras in Mexico have been on the decline since 2000.^[7] According to federal sources, approximately 529 maquiladoras shut down and investment in assembly plants decreased by 8.2 percent in 2002.^[8] Despite the decline, there still exist over 3,000 maquiladoras along the 2,000 mile-long United States–Mexico border, providing employment for approximately one million workers, and importing more than $51 billion in supplies into Mexico.^[9] As of 2006, maquiladoras still account for 45 percent of Mexico’s exports.^[10]

[edit] Border Industrialization Program

Following the United States’ decision to eliminate the Bracero Program in 1964, the Mexican government introduced the Border Industrialization Program (BIP) in 1965, which contributed to the establishment of industries along the United States-Mexico border. The primary intentions of the BIP were to encourage industrialization in Mexican border regions, attract foreign investment to aid in Mexico’s economic development, and to reduce the unemployment rate along the Mexican side of the border.^[11] The BIP allows for duty-free importation of foreign products that will be manufactured or assembled in maquiladoras. The only fees would be placed on the value that was added to the particular product or service while in Mexico before being exported. Originally, the BIP included only a strip of 20 kilometers along the United States-Mexico border, but in the early 1980s, the original precepts of the BIP and the regulations surrounding the maquila industry were revised by the Mexican government so that the industry would not be confined to the Border States, but could expand throughout the entire country.^[12] The intention was to allow for more balanced economic growth in Mexico, create more employment opportunities in the interior states, and reduce migration northward to the border region.

[edit] NAFTA

The North American Free Trade Agreement, which was enacted in 1994, eliminated tariffs and other barriers to trade between Canada, Mexico, and the United States. Therefore, maquiladoras could enjoy tax breaks, not only in the border regions, but anywhere in the country as well. After the advent of NAFTA, the maquiladora industry expanded even more rapidly, and it was presumed that the industry would stray from the border regions and into the interior states. While nearly every state in Mexico now has a maquiladora, the vast majority are still located along the United States-Mexico border.^[13]

NAFTA also made it illegal for nations to pass laws that infringe on a corporation's ability to make a profit, which means that labor and environmental protections are eliminated. This lead to high-paying, environmentally-regulated industrial jobs in the United States being converted into low-paying, environmentally-unregulated jobs in Mexico, and has been blamed in part for the rise of undocumented laborers crossing the Rio Grande to jobs in the United States.

[edit] Controversies and Concerns

[edit] Gender

Mexico possesses a strong system of labor laws, yet enforcement of these laws within the maquiladora industry is often lax.^[14] While most people who were employed under the original Bracero Program were men, the majority of maquiladora employees are women.^[15] Women are considered to be preferred to men because women will typically work for cheaper wages, and are easier for male employers to direct and impose poor working conditions on. Some maquiladora operators have admitted a preference for women also because women often display a greater level of patience and higher dexterity than men in performing the standardized and repetitive work of an assembly plant. Therefore, the maquila industry has, based on these conditions, been accused of the sexual exploitation of women. On the other hand, opponents of this allegation argue that women are paid higher wages working in a maquiladora than they commonly would in other forms of employment in northern Mexico. In addition, some have argued that maquiladora employment enables women to make their own money and thus become more independent, while teaching them new skills and giving them more opportunities that they may not otherwise acquire.

The maquiladora operators have also been accused of discrimination of child-bearing-aged women in order to keep costs down because Mexico’s labor laws contain extensive maternity requirements. They often demand pregnancy tests as a prerequisite to employment or insist that female workers use birth control.^[16] If a woman is found to be pregnant, it may likely hinder her chances of getting hired, and if an existing worker becomes pregnant, she may be terminated.^[17]

In recent years, however, there has been a shift toward hiring more male workers due to labor shortages and the emergence of heavier industries operating within maquiladoras.

[edit] Low Wages, Long Hours

One of the main goals of the BIP was to attract foreign investment. In order to do that, Mexican labor must remain cheap and competitive with other major export countries to keep the United States firms operating within the Mexican assembly plants. So to keep production high and costs low, maquiladoras have been accused of harsh working environments, which include low wages, forced overtime, and illegal working conditions for minors. Mexican women work for approximately one-sixth of the U.S. hourly rate.^[18] It has also been reported that the income one receives from work in a maquiladora is rarely enough to support a family. Low wages are a main reason for foreign investment. However, some management personnel condone low wages in maquiladoras by arguing that the cost of living is lower in Mexico than in other countries. Employee turnover is also relatively high, reaching up to 80 percent in some maquiladoras, due in part to stress and health threats common to this type of labor.^[19]

[edit] Environmental Concerns

Many of the environmental concerns, particularly in the border region of Mexico, are attributed to Mexico’s economic development strategies and intense industrialization. The dense number of maquiladoras and the inability of Mexico’s environmental regulatory program to keep up with the rapid growth of the industry over the past quarter of a century have contributed to some major environmental problems. Since many factories handle and use a number of toxic chemicals, solutions, and acids, the hazardous waste is a concern for both workers and residents surrounding maquiladoras. Pollution from the maquiladora industry is also a threat to the health of both United States and Mexican citizens. Both the United States and Mexican governments claim to be committed to environmental protection, yet environmental policies have not always been enforced.^[20] Although the La Paz Agreement signed by Mexico and the United States in 1983, requires hazardous waste created by United States’ corporations to be transported back to the U.S. for disposal, many companies avoid paying disposal costs by dumping toxins and other waste into Mexico’s rivers or deserts. The United States Environmental Protection Agency reports that only 91 of the 600 maquiladoras located along the Texas-Mexico border have returned waste to the United States since 1987.^[21]

Although NAFTA recognizes the need to prevent hazardous waste, Mexico’s waste imports have nearly doubled in recent years, and most of this waste comes from the United States.^[22] In Mexico, maquiladoras lack proper waste management facilities and the ability to clean up disposal sites, which is why much of the hazardous waste is illegally disposed of.^[23] Local governments have financially not been able to provide basic waste management services because maquiladoras pay few taxes, and as a result, there is more of an economic incentive to illegally dump hazardous waste than to safely and properly dispose of it. Environmental hazards associated with maquiladoras include polluted rivers and contaminated drinking water. According to the Southwest Consortium for Environmental Research and Policy (SCERP), all streams and rivers in the border region have suffered some amount of devastation as a consequence of the maquila industry.^[24] Furthermore, the United States Geological Survey, the state of California, and the Imperial County Health Department have all asserted the New River, which flows from Mexicali near the border to the Salton Sea in California to be "the dirtiest river in America".^[25] Along with water contamination, health-threatening levels of pollutants, such as carbon monoxide, are also emitted into the air. Ongoing exposure to toxic wastes can contribute to health problems such as cancer, skin disease, hepatitis, and birth defects. Furthermore, Mexico does not have any laws requiring industries to publicize basic environmental data on their operations, and so Mexico does not keep a very accurate inventory of hazardous waste.^[26]

[edit] Maquiladoras in Popular Culture

• Maquiladora is also a B Side recorded by the British alternative rock band, Radiohead. The track appears on the single release for High and Dry which was released in February of 1996. The track was considered for Radiohead's second LP titled The Bends.

• "At the Drive-In" song Invalid Litter Dept. criticizes the work done at maquiladoras and the mysterious murders of some of their female employees.

[edit] See also

• Dominican Republic-Central America Free Trade Agreement
• Economy of Mexico
• Free Trade Area of the Americas
• Free Trade
• Globalization
• List of international trade topics
• Colonias
• Sweatshop

[edit] External links

• NAFTA Secretariat
• Maquila Solidarity Network
• Mexico Solidarity Network
• Southwest Consortium for Environmental Research and Policy
• Human Rights Watch
• Hard Rock Music Video about Maquiladoras on the Internet Archive
• Green Plastic-Radiohead Fan Site
• Article on worker-run maquiladora in El Salvador

[edit] Footnotes

[edit] Resources

Brown, Garrett D. Protecting Workers’ Health and Safety in the Globalizing

Economy through International Trade Treaties. International Journal of

Occupational and Environmental Health. Apr-Jun 2005.

Campbell, Monica. Maquiladoras: Rethinking NAFTA. PBS, 2002.

Clapp, Jennifer. Piles of Poisons: Despite NAFTA’s Green Promises,

Hazardous Waste Problems are Deepening in Mexico. Alternatives Journal.

Waterloo: Spring 2002. Vol. 28, Iss. 2.

CorpWatch. Maquiladoras at a Glance. June 30, 1999.

http://www.corpwatch.org/article.php?id=1528.

Fatemi, Khosrow. The Maquiladora Industry: Economic Solution or

Problem? New York: Praeger Publishers, 1990.

Gruben, William C. and Sherry L. Kiser. The Border Economy: NAFTA and

Maquiladoras: Is the Growth Connected? Federal Reserve Bank of Dallas.

June 2001.

Hampton, Elaine. Globalization Legacy: A View of U.S. Factory Involvement

in Mexican Education. Multicultural Education. Summer 2004.

Hausman, Angela and Diana L. Haytko. Cross-Border Supply Chain

Relationships: Interpretive Research of Maquiladora Realized Strategies.

The Journal of Business and Industrial Marketing. Santa Barbara: 2003. Vol.

18, Iss. 6/7.

Human Rights Watch. No Guarantees: Sex Discrimination in Mexico’s

Maquiladora Sector. The Maquiladora Reader. Philadelphia: Mexico-U.S.

Border Program, 1999.

Kamel, Rachel and Anya Hoffman. The Maquiladora Reader: Cross-Border

Organizing Since NAFTA. Philadelphia: Mexico-U.S. Border Program, 1999.

Kelly, Mary E. Free Trade: The Politics of Toxic Waste. The Maquiladora

Reader. Philadelphia: Mexico-U.S. Border Program, 1999.

Reed, Cyrus. Hazardous Waste Management on the Border. The Maquiladora

Reader. Philadelphia: Mexico-U.S. Border Program, 1999.

Shorris, Earl. The Life and Times of Mexico. New York: W.W. Norton and

Company, Inc., 2004.

Sklair, Leslie. Assembling for Development: The Maquila Industry in Mexico

and the United States. USA: Center for U.S. Mexican Studies, 1993.

Stoddard, Ellwyn R. Maquila: Assembly Plants in Northern Mexico. USA:

Texas Western Press. 1987.

The Human Race: Escaping From History. dir. Josh Freed. Green Lion

Productions Inc., videocassette, 1994.

Villalobos, J. Rene, et al., Inbound for Mexico. Industrial Engineer.

Norcross: April 2004. Vol. 36, Iss. 4.

Wilson, Patricia A. Exports and Local Development: Mexico’s New

Maquiladoras. USA: University of Texas Press, 1992.