Monday, December 13, 2004

Maquiladoras

Last week there was a UPI Report that Mexican maquiladora factories are leaving Mexico for lower cost locations in countries like Nicaragua and El Salvador. Other reports have talked about the ongoing loss of jobs from Mexico to China.

While this might mean a short-term influx of low wage maquiladora jobs in El Salvador, the lesson from the Mexican experience is that an economic plan founded on maquiladora-type factories as a source of economic growth is a tenuous one. The purchasers of maquiladora production will always be looking for a better deal. The race to the bottom is a necessary consequence of global "free" trade.

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