Refers to a factory (commonly located in Mexico or Central America) owned by a multinational corporation. NAFTA, which forms the basis of free trade, allows these corporations to import the raw materials into, for example Tijuana, Mexico which is just across the border. The product is manufactured there, by labourers, a high percentage of which are women, who earn extremely low wages. Until very recently, trade unions were non-existant in these countries, and still remain very scarce. This means that the workers have no real way to better their working conditions, or actually make enough money to feed their children.

This is a 1000 word paper done for a short course on Globalization at the University of Ljubljana, spring 2008.

"The spread of new technologies throughout the world is not working to advance human freedom. Instead it has resulted in the emancipation of market forces from social and political control. By allowing that freedom to world markets we ensure that the age of globalization will be remembered as another turn in the history of servitude."{1}John Gray

Abstract

The aim of this very short essay is to analyse globalization in a given context, to localize globalization if you want. The maquiladora or maquila (assembly) factories which are littered along the USA-Mexico border and elsewhere in Central America provide a fine example for they are a type of free trade zone/export processing zone commonly associated with globalization.

Globalization

As has been made clear by scores of scholars, there is no consensus on globalization. It is a dynamic concept that eludes any clear definition. Its economic aspect has been described as a "wave of neoliberalism".{2} At the root of globalization, in a broad sense, are recent technological advances; especially in communications and transportation. This means that "social connections ... transcend territorial geography"{3} which, put to practical use, stretches the reach of power. To give a random example one may consider the Iranian revolution of 1979. In which the exiled Ayatollah Khomeini gathered mass support by disseminating his teachings from Paris, France. It was a revolution "that was inaugurated by telephone, television and tape recorder".{4}

Today countries are very interdependent. Large multinational corporations (MNCs) now operate with considerable freedom. Neither their consumer markets nor their labour pools are limited by borders of any kind. Countries compete aggressively to attract companies offering cheap labour, lax regulations and low taxes.

Maquiladoras

A maquiladora{5} is a factory, usually assembly line type, where raw materials are imported, assembled and exported without tolls, taxes or tariffs. Maquiladoras only pay income taxes.{6} Maquiladoras are known as free trade zones in other parts of the world.

The maquiladora industry was originally thought of as a strategy to develop the Mexican economy. The USA and Mexico are seperated by a porous 3.169 km long border and in the 1960s an agreement{7} between the two countries regulating flows of migrant workers was cancelled. To alleviate the sudden rise of unemployment maquiladoras were created.{8}

In the area of bureaucracy (taxes, tolls, tariffs, customs,regulations) there is a great incentive for MNCs to outsource to a maquiladora, having such proximity to the American market. Today over 1.2 million Mexicans work in maquiladoras with 3,1 million working in related jobs, such as service jobs, generated by the maquiladoras.{9} In Central America the aggregate number is about 5.25 million.{10} From Mexico the main countries of export are, in the order of importance: S, UK, France, Canada, EU countries and Japan.

Because they are - seen to be - docile, mostly female workers with little education are hired at maquiladoras. The ILO estimates 60% are women in Mexico, in other areas in Central America the proportion is higher. Labour unions are ineffective. In 2005 Human Rights Watch appealed to the Mexican senate not to pass amendments to the labor law because it would actually impair rights already ensured by law.{11}

For large corporations, in the past, mass layoffs were avoided at all costs. Come globalization, the work force has, in an even more literal sense, become another commodity, bought and sold at the behest of impersonal market forces.{12}

In his research on the grassroots mobilisation of maquiladora-workers, Robert Huesca tells of young people that "live in colonias, or poor neighborhoods, usually without basic services of electricity, telephone, paved streets, water, or sewers"{13} whose work is characterised by a "generalized climate of fear cultivated by unions and management".{14} Under such circumstances, any solidarity between workers, any fight for improved conditions or better pay, must take place clandestinely. To do so independent labour organisations field promotoras who keep a low-profile and try to circulate between workers and create trust and cooperation.

The number of maquiladoras and employment in them is growing substantially. This means that a substantial proportion of the Mexican work force has a job to begin with. Esteemed economists like Mr. Bhagwati assure us that criticism of maquiladora-type "overseas operations in multiple locations" in this case operated by "Nike and Gap, two fine multinationals," is misguided. Unfortunately "it is not possible to avoid lapses altogether from whatever is defined as good behaviour: the host governments often force the hiring of domestic managers who are regrettably part of cultures that are not as egalitarian and mindful of the dignity of other working below them as the West would like them to be."{15}

Conclusion

Globalization, however defined, has brought about changes on a massive scale. Some of them are quite profound, inconsistent with what one might presuppose. In Africa, in the early 1990s, a researcher visiting a rural village found herself being treated to the American Hollywood film Basic Instinct, before it had premiered in London.{16} In Ciudad Juarez, women are the victims of unspeakable acts of violence, partly because of maquiladoras.

In (northern parts of) Mexico it has created what seems to be a permanent type of low wage/low skilled assembly work industry, overwhelmingly employing young women. This industry is heavily dependent on the state of the US economy. Moreover, the North-American Free Trade Agreement, which came into effect in 1994, has worsened the working conditions in Maquiladoras and lowered the exports earned there.{17}

This has been made possible by advances in means of production (technology) and transportation and socio-economic liberalization, the latter strongly linked to, although not strictly speaking a component of, globalization.



1: Gray, John. False Dawn:The Delusions of Global Capitalism. p 208

2: Scholte, Jan Aart. Globalization, Second Edition: A Critical Introduction. p 56

3: Ibid. p 61

4: Lewis, Bernard. The Shaping of the Modern Middle East. p 122

5: The spanish term maquiladora refers either to the portion of grain the miller would receive, by mutual consent, for having processed grain for someone or else simply to a machine (s. maquina) from which maquilla which means to assemble or put together is derived.

6: Toledo, Enrique de la Garza. The Crisis of the Maquiladora Model in Mexico.

7: This agreement was called the Bracero-program.

8: Huesca, Robert. Social Aspects of Labor Organizing: Maquiladora Workers in a Grassroots Development Effort.

9: In the 1992 U.S. presidential campaign, candidate Ross Perot coined the phrase "the great sucking sound", refering to the loss of jobs immanent with the ratification of NAFTA.

10: Boyenge, Jean-Pierre Singa. ILO database on export processing zones (Revised). April 2007.

11: Human Rights Watch. Mexico: Fox’s Labor Reform Proposal Would Deal Serious Blow to Workers’ Rights - Letter to Mexico's Chamber of Deputies. February 9, 2005. http://www.hrw.org/english/docs/2005/02/09/mexico10156.htm.

12: Klein, Naomi. No Logo. p. 195-199

13: Huesca, Robert. Social Aspects of Labor Organizing: Maquiladora Workers in a Grassroots Development Effort. P 244.

14: Ibid. P 242.

15: Bhagwati, Jagdish. In Defense of Globalization. p. 23

16: Giddens, Anthony. RUNAWAY WORLD – Week 1. http://news.bbc.co.uk/hi/english/static/events/reith_99/week1/week1.htm (1 April 2008)

17: Lila J Truett; Dale B Truett NAFTA AND THE MAQUILADORAS: BOON OR BANE? Contemporary Economic Policy; Jul 2007; 25, 3; ProQuest Social Science Journals pg. 374

References

Bhagwati, Jagdish. In Defense of Globalization. Oxford University Press. 2004.

Boyenge, Jean-Pierre Singa. ILO database on export processing zones (Revised). April 2007. http://www.ilo.org/public/english/dialogue/sector/themes/epz/epz-db.pdf (April 1, 2008)

Giddens, Anthony. RUNAWAY WORLD – Week 1. http://news.bbc.co.uk/hi/english/static/events/reith_99/week1/week1.htm (1 April 2008)

Gray, John. False Dawn: The Delusions of Global Capitalism. 2nd ed. Granta Books. 1998.

Huesca, Robert. Social Aspectsof Labor Organizing: Maquiladora Workers in a Grassroots Development Effort. Journal of Developing Societies. 2003; 19; 227-67 http://jds.sagepub.com/cgi/content/abstract/19/2-3/227 (April 1, 2008)

Human Rights Watch. Mexico: Fox’s Labor Reform Proposal Would Deal Serious Blow to Workers’ Rights - Letter to Mexico's Chamber of Deputies. February 9, 2005. http://www.hrw.org/english/docs/2005/02/09/mexico10156.htm. (April 1, 2008)

Klein, Naomi. No Logo. Flamingo. 2001.

Lewis, Bernard. The Shaping of the Modern Middle East. Oxford University Press. 1994.

Scholte, Jan Aart. Globalization, Second Edition: A Critical Introduction. Palgrave Macmillan; 2 edition. September 15, 2005.

Toledo, Enrique de la Garza. The Crisis of the Maquiladora Model in Mexico. Work and Occupations 2007; 34; 399. http://wox.sagepub.com/cgi/content/abstract/34/4/399. (April 1, 2008)

Truett, Lila J and Truett Dale B. NAFTA and the Maquiladoras: Boon or bane? Contemporary Economic Policy; Jul 2007; 25, 3; ProQuest Social Science Journals pg. 374

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