Maquilladora, Essay Example

A maquilladora is a factory involved in the importation of materials and other equipments on a tariff-free and duty-free basis for manufacturing or assembly and re-exporting these assembled products. The plant usually takes the name “in-bond” or “twin plant” industry. The term “maquilladora”, refers to the practice of charging “miller’s portion” for processing people’s grain in Spanish language.

Maquilladora plants started in Mexico in the early 1960s along the borders of United States of America. By the mid 1990s, approximately 2,000 maquilladora plants had employed over 500,000 workers. In a short period of running, the number doubled. These Maquilladora plants engage mostly in the production of plastics, appliances, furniture, electronic equipment, clothing, and auto parts. Over eighty percent of these products from the plants are shipped over to the U.S. where there is a larger market for the products. North of United States is the main beneficially of these products (Rachel 5).

All raw materials for these plants including machinery and plants are imported into the country on a temporary basis. This is usually duty free for a period of 18 months. For machinery, the release to other countries is possible but for parts they must be assembled and leave the country only when finished as final products. The plants operate under the Free Trade Agreement of North American (NAFTA). They do not pay duty fees for parts but for machinery, they pay a rate of 10% of Mexican VAT on the value of the parts.

Over one million of the total Mexican population works in at least 3,000 maquilladora plants. These include export and manufacturing plants located in northern Mexico. They produce products and parts for the United States. Many of these maquilladora owners are from Japan, U.S. and European countries. The Maquilladora plants prevail in Mexico especially in cities including Matamoras, Tijuana, Ciudad and Juarez. The cities lie across the border of the United States cities (Leslie 62-75).

Workers in these plants face low standards of working conditions. Most of them do not even know their rights or any existence of labor unions. The workers normally work for over 75 hours a week indicating total exploitation. The starting wage in average for most maquilladora new workers is valued 110 pesos per day. The workers who manage to stay for at least 3 months realize an increase of the wages later on. This has facilitated the poor life of the Mexicans who live on a hand to mouth daily routine.

The plants face high competition from across the globe. Since globalization, the industry faces physical restructuring. This has led to high competition from other plants. There has been low-cost offshore assembly especially in places like China, Taiwan and Central America countries. The main challenger is China. This is because China is growing at a fast rate and turning out to be the cheap export location for assembled products. Their vibrancy has lowered and weakened in recent years (Moffat 19).

A study on these plants, reported that over 500 plants have now faced closure since the beginning of the present decade. This has led to loss of jobs for the majority of Mexican residents causing high rates of dependency. According to federal sources, 529 and more plants have shut down. The assembly plants investment decreased by over 8.2 percent in the year 2002.

The plant faces a threat of closing down owing to environmental degradation facts. To make matters worse, most of these plants have been the leading pollutant with much of the industrial waste causing environmental damage around the Mexico northern region. This has been a major concern of the environmental organizations globally. It is soon facing closure threats if proper means of disposure and release of toxic wastes is not realized (Moffat 19).

Works Cited

Leslie, S. (1993). Assembling for Development: The Maquilladora Industry in Mexico and the United States. USA: Center for U.S. Mexican Studies. 1993 P 62-75

Moffat, Allison. (2006). “Murder, Mystery and Mistreatment in Mexican Maquilladora” Women & Environments International Magazines, 66 (2006): 19.

Rachel and Hoffman (1999). The Maquilladora Reader: Cross-Border Organizing Since NAFTA. Philadelphia: Mexico-U.S. Border Program, 1999. p5.