Maquiladoras

Maquiladoras are cross-border factories that have emerged in the global economy. The term maquila—first used to designate the grain retained by peasants as compensation for their work in medieval Spain—was extended in the 1970s to designate export-oriented or subcontracted plants operating along the U.S.-Mexico border. In the same way that workers change wheat into flour, maquiladoras process raw materials and components into finished or semifinished products, which are then sold in countries other than those in which they were manufactured.

Although Mexico boasts one of the oldest maquiladora sectors in the world, maquila production has proliferated throughout the world, especially in export processing zones (EPZs), that is, geographical areas set aside for exportable production under duty-free and other special customs and trade conditions. In 2007, 130 countries hosted approximately 3,500 EPZs, employing approximately 66 million people; of these 60 million, 40 million of them worked in China and the rest mostly in Latin America and the Caribbean.

Maquiladoras, also known as “in-bond” factories, may be seen as evidence of increasing economic integration at the international level. Mexico's Border Industrialization Program, which promoted the expansion of maquiladoras since 1965, was a blueprint for the North American Free Trade Agreement, implemented as a bilateral [Page 1110]accord between Mexico and the United States in 1994. In both cases, existing regulations were waived or eliminated to allow investments across international demarcation lines greater freedom and rapidity.