Maquiladoras Established | Research & Encyclopedia Articles

Maquiladoras Established

Mexico 1960s

Synopsis

Also known as "in-bond" plants or "twin" plants, maquiladoras are assembly plants in Mexico. Most of the maquiladoras are found along the border with the United States, although they are established throughout the country. Maquiladoras reflect shifts in global capitalism that emphasize production sharing. Increasingly, international corporations have divided the capital-intensive and technology-intensive aspects of production from those that are labor intensive. Unskilled assembly is done in developing countries, where wages are low, whereas skilled operations take place in developed countries that possess more skilled labor and technology.

In the maquiladora industry, firms from the United States and other foreign countries send component parts to Mexico. Mexican workers then assemble the product in the maquiladora plants. Once the product is assembled, it is exported back to the United States. Government regulations on both sides of the border help promote the industry. In Mexico, components, machinery, and supplies can be imported duty-free as long as the finished product is then reexported. In the United States, raw materials and components are not taxed when reentering the country. Tariffs apply only to the value added in Mexico.

The maquiladora industry began in the mid-1960s, when it concentrated along the border.

Maquiladoras Established article

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