Maquiladoras and NAFTA

What is the main purpose of NAFTA? What is a maquiladora?

Maquiladoras: U.S. and foreign-owned factories in Mexico Production: the act of combining natural resources, human resources, capital goods to make goods and services

There exists over 3,000 Maquiladoras along the 2,000 mile-long United States–Mexico border, providing employment for approximately one million workers.

Importance of Maquiladoras Maquiladora exports represent almost 50% of Mexico’s total exports. The industry employs 10% of Mexico’s formal workforce.

Why are they located along the border? Proximity with the U.S. Market: Works for Large items, Big-screen TV’s, freezers, water heaters and blades for wind turbine’s. All produced in Juarez. Quick turnarounds: Frequent changes to products or an ASAP shipment to the U.S. i.e. Auto parts. Intellectual property: Used in the production process can be at risk overseas, Mexico offers better protection than other countries.

Companies

Major Trading Partners Exports: US 80.5%, Canada 3.6%, Germany 1.4% Imports: US 48%, China 13.5%, Japan 4.8%, South Korea 4.6%, Germany 4.1%

Problems Water: Surface and groundwater supplies are threatened along the US-Mexico border due to the dumping of raw sewage, agricultural runoff, and industrial and hazardous waste pollution... Air: According to the EPA, border area residents are exposed to health-threatening levels of air pollutants, including carbon monoxide.

Factories lack health and safety regulations leading to hazardous working conditions. Lack of labor rights: long hours, no overtime pay Worker abuse Exploitation of child labor Poverty and a low standard of living force many laborers to illegally enter the US for better paying jobs.

Pick two and write a paragraph for each. 1) Why do companies want to create maquiladoras in Mexico? 2) Why did the government of Mexico want to encourage companies to create maquiladoras along the border? 3) What do you think the government of Mexico should do to improve conditions and wages in maquiladoras? 4) What would you recommend be done about NAFTA? Should it be repealed? Should it be changed to make it better? If so, what changes would you recommend?