Maquiladoras Analysis Paper
Amir Ebadi-Angorani
Professor David Cohen
WOOD 461
1 February 2014 An Analysis of the Export Processing Zone of Northern Mexico: Maquiladoras Although the Mexican maquiladora system is an important component of Mexico-US trade, the connection between the acceleration in maquiladora growth and the North American Free Trade Agreement (NAFTA) needs clarifications. Manufacturing in Mexico obligates American firms to comply with Mexico 's detailed labor regulations; however, increasing foreign investment requires that the Mexican Government attempt to make these regulations flexible enough not to scare off foreign investors. Consequently, as much as NAFTA may have increased economic benefits to the Mexican economy, the maquiladora development …show more content…
The role that the maquiladoras play in the development of a country can be discussed through evaluation of a thriving international capitalism occurring in Mexico 's northern boundary. The word, maquiladora, is used to describe the foreign-owned assembly plants clustered along the border of Mexico and United States. The maquiladora program was first initiated in 1965, a year after the eligibility of Mexican agricultural workers to legally work in the United States through the Bracero program was terminated (Hanson 2003). After this, Mexican border towns such as Tijuana and Juarez became overcrowded with citizens in temporary settlement to find opportunities of returning to the United States. Subsequently, shortages of food, water, shelter and transportation caused the Mexican government to create the National Border Development Program (PRONAF) in 1965 (Gruben 2011). PRONAF was the first step to establishing the maquiladora sector of Northern Mexico. It was implied as a win-win situation that would improve Mexican economy from foreign investment as well as create jobs for those living in the overcrowded border towns. Regions like the maquiladora are referred to as Export Processing Zones (EPZ), which are big industrial estates set up with multinationals in mind (Salzinger 2003). In this case, government bureaucrats from foreign countries would go to major world …show more content…
Today, there is less work because of expanding globalization and more favorable labor supply in countries elsewhere such as China. The workforce will continue to endure the same environmental and health issues left behind from the maquiladoras. I believe there 's a serious dilemma for policy makers looking for solutions to the problem. An obvious public policy solution would be to increase Mexico 's stock of human capital through increasing funding for education, but data from the past indicates migrations of educated Mexicans who choose to seek jobs elsewhere like in the United States (Munishi 2003). Also, better educated citizens may not necessarily mean a better educated and more productive work force due to a country 's poor infrastructure, labour market firmness and institutional and regulatory deficiencies that won 't be able to provide high standards to education to bigger numbers of people (Munishi
Professor David Cohen
WOOD 461
1 February 2014 An Analysis of the Export Processing Zone of Northern Mexico: Maquiladoras Although the Mexican maquiladora system is an important component of Mexico-US trade, the connection between the acceleration in maquiladora growth and the North American Free Trade Agreement (NAFTA) needs clarifications. Manufacturing in Mexico obligates American firms to comply with Mexico 's detailed labor regulations; however, increasing foreign investment requires that the Mexican Government attempt to make these regulations flexible enough not to scare off foreign investors. Consequently, as much as NAFTA may have increased economic benefits to the Mexican economy, the maquiladora development …show more content…
The role that the maquiladoras play in the development of a country can be discussed through evaluation of a thriving international capitalism occurring in Mexico 's northern boundary. The word, maquiladora, is used to describe the foreign-owned assembly plants clustered along the border of Mexico and United States. The maquiladora program was first initiated in 1965, a year after the eligibility of Mexican agricultural workers to legally work in the United States through the Bracero program was terminated (Hanson 2003). After this, Mexican border towns such as Tijuana and Juarez became overcrowded with citizens in temporary settlement to find opportunities of returning to the United States. Subsequently, shortages of food, water, shelter and transportation caused the Mexican government to create the National Border Development Program (PRONAF) in 1965 (Gruben 2011). PRONAF was the first step to establishing the maquiladora sector of Northern Mexico. It was implied as a win-win situation that would improve Mexican economy from foreign investment as well as create jobs for those living in the overcrowded border towns. Regions like the maquiladora are referred to as Export Processing Zones (EPZ), which are big industrial estates set up with multinationals in mind (Salzinger 2003). In this case, government bureaucrats from foreign countries would go to major world …show more content…
Today, there is less work because of expanding globalization and more favorable labor supply in countries elsewhere such as China. The workforce will continue to endure the same environmental and health issues left behind from the maquiladoras. I believe there 's a serious dilemma for policy makers looking for solutions to the problem. An obvious public policy solution would be to increase Mexico 's stock of human capital through increasing funding for education, but data from the past indicates migrations of educated Mexicans who choose to seek jobs elsewhere like in the United States (Munishi 2003). Also, better educated citizens may not necessarily mean a better educated and more productive work force due to a country 's poor infrastructure, labour market firmness and institutional and regulatory deficiencies that won 't be able to provide high standards to education to bigger numbers of people (Munishi