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Introduction In this paper I will discuss the history and practices of the Maquiladora industry I will discuss its background its problems the benefits it offers to United States companies and the impact the NAFTA has and will have on the industry In addition I will make a suggestion on a possible strategy the Maquiladoras can adopt in order to address the challenges brought on by the NAFTA to ensure it remains a strong force in the future Background Mexican agricultural workers had been granted temporary work visas allowing them to work in the United States agricultural industries through a program called the Bracero Program until 1965 when this program was terminated As a result of this termination the unemployment rate had exceeded 70 in certain border cities In May of 1965 the Border Industrialization Program was established as a replacement for the Bracero program It was later renamed the Maquiladora Program The program was established by the Mexican government to provide employment for Mexicos rapidly growing population along its border with the United States This program was utilized to keep Mexicans from entering the United States The idea was that Mexican workers would be kept on the Mexican side of the border if they were given factory jobs on the Mexican side The Maquiladora program also wanted to attract foreign manufacturing facilities technology and know-how by giving a permanent tax holiday to manufacturing companies that would set up twin plants on the Mexican side of the border In the beginning of the program all foreign-owned operations had to be located within a 20-kilometer strip along the US-Mexican border Since 1972 they can be located anywhere in Mexico In 1996 there were around 2500 Maquiladoras 35 of them were located in the interior states of Mexico Last year there were over 3000 and more and more of these operations are being located outside of the border regions Each of Mexicos 31
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