(Mexico) A manufacturing or assembly plant located in Mexico where raw materials, component parts and support equipment (such as computers, administrative materials and transportation equipment) are imported duty- and license-free and whose production is exported, often to the United States, for low or no import duty. These plants are located primarily along the Mexico-U.S. border and enjoy other exemptions from Mexican laws governing foreign companies.
The Maquiladora program was established in 1965 after a 1942 U.S.-Mexican program to assist Braceros (extremely poor Mexican migrant farm workers living along the Mexican border), was abolished in 1964. In 1989 the program was liberalized further to make it an even more attractive and dynamic sector of the economy.
The maquiladora system is also called an “in-bond” or “free trade zone” program as raw materials, component parts and support equipment is imported under bond with the stipulation that it eventually be reexported.
Critics charge that these plants are notorious for environmental degradation, low wages and poor working conditions.
Proponents respond that the plants provide needed jobs to Mexican workers, provide the second largest source of foreign income to the country (after oil exports) and lessen the flow of illegal immigration to the United States.
From Spanish, the word is pronounced mah-kee-lah-DOH-rah. It is usually shortened to maquila (mah-KEE-lah).