Mexico\u27s Maquiladora Program: Challenges and Prospects.

A Maquila is usually a one-hundred percent foreign-owned assembly or manufacturing operation located in Mexico. They manufacture, process or assemble an array of products under Mexican law. Both the United States and Mexico receive a great deal of economic benefits from employing the maquiladora system, but it can also have some political and social consequences that make the system economically volatile. The viewpoints of both the U.S. and Mexican governments are considered, as well as the U.S. and Mexican industry, in evaluating the system’s overall effect on U.S.-Mexico relations. The general conclusion is that maquiladoras are extremely desirable for labor intensive industries that can use them without putting company secrets at risk. The Maquiladora Program, established in the 1960s, employed thousands of laborers who could not work under the “Bracero Program.” The system has boomed in recent years due to the government providing special authorizations and tax breaks. For the U.S. government, the system eases the immigration problems and helps the U.S. stay economically competitive, yet it is difficult to rely on the volatile nature of the Mexican economy. The Mexican government benefits with reduced unemployment and increased incentives for capital investments in Mexico, yet it invites excessive U.S. influence on its governmental policies. The system will continue to flourish as long as it allows the U.S. to continue to be economically competitive