This massive border industry was created in 1964, and dominates the industrial makeup of the 2,000-mile border between the United States and Mexico. Essentially, it was established by the Border Industrialization Program (B.I.P.) as a replacement for the then-ending Bracero Program.
The advent of the maquiladora industry transformed the border regions into expeditiously developing industrial zones, particularly appealing to American firms that utilized massive labor forces to manufacture goods. Under the provisions of the U.S.-Mexican Twin Plan Agreement, raw materials can be temporarily imported into Mexico duty free under the promise of future exportation.
Products are assembled and/or manufactured utilizing inexpensive Mexican labor and the finished products are exported back to the United States where duty is paid only on the Mexican value added.
A "twin plant" may be located anywhere in the United States, with its sister plant built anywhere in Mexico. Most plants in Mexico are located in U.S.-Mexico border towns, to take advantage of the proximity to American markets, suppliers and certain border trade incentives.
Border towns have a long history of forging agreements with their U.S. counterparts, on matters such as fire fighting and public transport. In New Mexico, even Anglo ranchers have forged close ties with cattlemen across the border.
Along the U.S.-Mexico border, there are over 4000 maquiladoras that employ approximately 1 million workers. The importance of these products—almost half consisting of textiles and consumer electronics—were second only to oil in the Mexican economy.
The entire economic well-being of the Rio Grande Valley in Texas is said to hinge upon the maquiladora industry. In the developing world, only China has received more inward investment than the Mexican border region.
Since the advent of NAFTA and it’s opening of foreign trade, companies including BMW, Sony and Matsushita have set up maquiladoras in cities like Reynosa and Matamoros. In turn, smaller supply companies have grown up in McAllen and Harlingen, where land is cheaper.
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