Globalization and the Maquiladoras

views updated

Globalization and the Maquiladoras

Magazine article

By: Jen Soriano

Date: November 24, 1999

Source: Soriano, Jen. "Globalization and the Maquiladoras." Mother Jones (November 24, 1999).

About the Author: Jen Soriano is a staff writer for Mother Jones, an independent, nonprofit magazine known for its commitment to social justice and its investigative reporting.

INTRODUCTION

The Maquiladora Program is an attempt to provide economic development for Mexico and cheap labor for Mexico's trading partners as well as low prices for consumer goods. It is a set of international trade policies and regulations that permit a business in the U.S. or another originating nation to temporarily transfer goods to Mexico, where the products receive added value with minimal or no tariffs being applied to the goods as long as they are shipped back to the originating nation.

The Maquiladora Program has its roots in the Border Industrialization Program (BIP) enacted by the Mexican government in 1965. This program allowed foreign-owned firms to build assembly plants in Mexico. These plants were known as maquiladoras, after maquilar meaning "to assemble." The government expected to promote economic development by attracting foreign investment and to provide employment opportunities for Mexicans. Although the BIP provided the opportunity for maquiladoras to be established and to operate, several modifications since 1965 have resulted in a more formalized, more highly regulated and controlled program.

In order to provide for more standardization, the Mexican government issued the Maquila Decree on December 22, 1989 that established the Maquiladora Program. The decree named the Mexican Secretariat of Commerce and Development as the agency responsible for the regulation of maquiladoras and specified that while the maquiladora is a registered Mexican corporation, 100% of the capital investment, ownership, and management of the firm may be foreign.

PRIMARY SOURCE

Increased competition across borders means business needs to keep costs and prices down. One tried-and-true way to do that is to move factories out of developed nations and into poorer ones, where worker safety regulations are rare and wages are often exploitatively low. Maquiladora workers are converging on Seattle to be heard.

Martha Ojeda has a message for the thousands of government officials meeting at the Seattle WTO summit to discuss how best to promote global free trade. "We want fair jobs, not free trade," says Ojeda, executive director of the San Antonio-based Coalition for Justice in the Maquiladoras.

Ojeda is leading a squadron of Mexican factory workers to the streets of Seattle for the summit to denounce the ways free trade impacts the lives of working people in developing countries.

"We will be there to ask what happened to the promises of free trade," says Ojeda. "Where are the improved living conditions? Where are the better jobs?"

In Mexico, nearly six years after the passage of the North American Free Trade Agreement, which was supposed to create more jobs and higher wages throughout North America, one of the consequences of free trade has been the proliferation of maquiladora factories, which critics call little better than sweatshops. Relaxed rules on foreign investment and export duties have made it far easier for foreign companies to open these low-wage assembly plants where workers make everything from leather gloves to televisions for multinational companies including BMW, Chrysler, Fisher Price, Sony, and Xerox, mostly for export to the US.

There are by now some 4,000 maquiladoras concentrated along the U.S.-Mexico border. According to the Mexican business journal El Financiero, employment in the maquiladoras nearly doubled between 1993 and 1998, and now stands at over one million people.

According to a Workers University of Mexico study, maquiladora workers earn between $3.50 and $5 a day—enough to do little more than survive in the border towns, where the cost of living is thirty percent higher than in the rest of the country.

Life inside the factories is often grim. "Workers labor from sunrise to sunset. They never see day light," says Ojeda, who was a maquiladora worker for twenty years. "They are sometimes exposed to toxic chemicals, and in one case workers were given "vitamins" which turned out to be amphetamines. They rarely see their families; often wives will work for one shift, then switch with their husbands who take the next shift." Sexual harassment of women employees, who are the majority of maquiladora workers, is common—and not prohibited by Mexican law. Some have even been murdered.

While NAFTA promoted free trade among Mexico, Canada, and the U.S., the WTO promotes free trade among 135 member nations. More free trade, say critics, means more maquiladora-style manufacturing.

"The maquiladoras are one manifestation of the global sweatshop," says Larry Weiss, labor and globalization program director at the Resource Center of the Americas. "These same export processing zones can be found in Jakarta, Manila, Zimbabwe, Costa Rica—all over the Third World and in the former Soviet Bloc. This is what globalization is all about."

At workshops and rallies throughout the Seattle meetings, the maquiladora delegation will join farm workers, union members, and activists from all over the world in trying to get their concerns heard. "We are not expecting to make $500 a week," says Ojeda. "In Mexico, as everywhere, we simply want fair wages, good working conditions, and the ability to live with dignity." In short, she says, "We want our rights to be included in the WTO's commercial agenda."

SIGNIFICANCE

The Mexican government made attempts to protect maquiladora workers, but these workplace regulations have not been effectively enforced. Workers are officially limited to a maximum work week of six eight-hour shifts with paid pregnancy leave, profit-sharing, national holidays, vacations, and severance benefits. In reality, pregnant workers are often fired to avoid the payment of pregnancy leave and rampant corruption has allowed businesses to ignore the other rules. The result is a continued brutalization of workers that has fueled anti-globalization activism.

The implementation of the North American Free Trade Agreement (NAFTA) in 1994 raised concerns among reformers. Many anti-globalization and anti-maquiladora activists feared that it would negatively affect Mexican workers. NAFTA did result in a rapid expansion of trade between Mexico and the United States. However, the direct impact of NAFTA on the operation of maquiladoras and the overall maquiladora output has been minor. U.S. industrial production combined with international currency and wage variability had the greatest influence on maquiladora employment in the first decade of NAFTA. The future of the maquiladoras in the face of social, political, and economic upheavals in Mexico at the start of the twenty-first century is not clear.