The Effects of NAFTA on Maquiladoras
story | Lindsay Gebhart and Jon Dieringer
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Giant complexes of cement and glass stand where vast desert once was. The maquiladoras, American-owned factories in Mexico, are enormous, and their modern design creates a stark contrast with the run-down gas stations, homes and stores in their neighborhoods.

The maquiladoras are a sanitized version of doing business in Mexico that began in 1994 when the North American Free Trade Agreement took effect. NAFTA allows American businesses to go within 50 miles of the U.S. border in an area called the Free Trade Zone. In this area, businesses are not subject to U.S. taxes or many tariff restrictions. The signees of NAFTA—the United States, Mexico and Canada—have set a goal of 2008 for full implementation of the agreement’s many objectives. 

But the changes are already apparent. In 1990 there were 1,700 American factories in Mexico; in 2001 there were 3,600.

Currently, there are no health benefits and, for the most part, no unions in Juarez, according to Public Citizen, a non-profit public interest group. People interviewed for this story accused American companies of a number of abuses in Mexico:

• Improperly disposing waste, which has led to the contamination of drinking water and an elevated risk of Hepatitis A.
• Working people up to 12 hours a day.
• Showing a hiring preference toward women because they are more docile than men.

Since NAFTA took effect, the minimum wage has fallen 20 percent, according to Public Citizen. Half of the maquiladora workforce makes less than $8 a day.

The women who work in maquiladoras are often from rural parts of Mexico and have no family support system, says Tom Hanson, director of the Mexican Solidarity Network. That makes female maquiladora workers targets for killers.

The best-paid maquiladora workers are in the auto segment, Hanson says—they are paid $70 a week.

Tom Fullerton, an associate professor of business and finance at the University of Texas at El Paso, says NAFTA is not all bad, but some policies passed by the Mexican government have hampered reform.

Maquiladoras have been in the area since the 1960s, but the Mexican goverment makes it hard for companies to lay off or terminate workers,” Fullerton says. “So when the economy goes into a decline, the wages the employees receive suffer since the companies cannot decrease their employees.

“A lot of people like to claim the maquiladoras don’t pay fair wages, but look at the thousands at the border. Mexicans are voting with their feet—they leave behind their family and friends. Their situation could be much worse.”

Once, NAFTA was good for the border, says Richard Bath, a retired professor of political science at the University of Texas at El Paso.

“A lot has slipped behind,” he says. “A lot of the gains after NAFTA have been negated. The whole concept of NAFTA is anti-agricultural.”

Sales of corn, Mexico’s staple crop, have been stunted by U.S. exports. When NAFTA began, nearly one quarter of Mexico’s population—8 million people—was involved in agriculture. This number fell to 6.5 million people by 2003.

Global Trade Watch says the Mexican government recently estimated that more than half of its population doesn’t earn enough money to cover the basics of food, clothing, health care, housing, education and public transportation.

“Unemployment in Juarez is only at about 2 percent, but if you sell cigarettes on the street, you are considered fully employed,” says Victor Muñoz, the co-director of the Coalition Against Violence for Women and Families on the Border.

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