Magazine article Monthly Review

Do Maquiladoras Matter?

Magazine article Monthly Review

Do Maquiladoras Matter?

Article excerpt

While English words have been flooding into Spanish for most of the century, a few words have gone in the opposite direction. Over the past decade working people in the United States have started hearing more and more about 'maquiladoras.' Originally from the Spanish for "multure," a fee for milling grain, the word has come to mean an assembly plant, and especially the sort of plant that dominates the Mexico-U.S. border, where for the past thirty years Mexico has given U.S. and other foreign companies tariff breaks on goods imported for assembly in Mexico.

In other words, maquiladoras are the runaway shops that have been taking over assembly work previously done in the United States - providing U.S. employers with a convenient excuse for cutting wages. Any effort to maintain the living standards our parents enjoyed thirty or forty years ago, we are told, will result in our jobs fleeing to Mexico or to still more exotic places like Indonesia and Vietnam. A study published in June 1997 by Kate Bronfenbrenner of the Cornell School of Industrial Relations reports that 60 percent of union organizing efforts in the U.S. manufacturing sector are now met with management threats to close down operations. This is up from 29 percent before the North American Free Trade Agreement (NAFTA) went into effect on January 1, 1994.(1)

There's considerable exaggeration in these threats, of course. The jobs that leave the United States are for obvious reasons limited to the more mobile industries: textiles, for example, or assembly work for the apparel, electronics and auto industries. The flight of even a large number of plants in these low-paying, labor-intensive industries can only have a limited impact on the overall economy of a first world country. It is true that substantial amounts of U.S. capital are now being invested abroad, but as City College of New York economics professor William K. Tabb notes, "[t]hree-fourths of foreign investment and production by U.S.-based multinationals is in Western Europe, Canada and other high-wage countries." And Doug Henwood editor of the Left Business Observer writes that,"In other words, most of the 'globalizing' action is occurring in countries where wage and benefit levels are equal to or higher than those in the United States."(2)

At the same time, three successive U.S. administrations have put a great deal of effort into bolstering the maquiladora sector in adjacent third world regions, despite that sector's apparently limited importance to a country like the United States. The Reagan administration produced the Caribbean Basin Initiative (CBI); NAFTA was a joint venture of the Bush and Clinton administrations; Clinton is now pushing the Free Trade Area of the Americas (FTAA, or ALCA in Spanish), a sort of hemispheric NAFTA. Congress has revived the main features of the Caribbean Basin Trade Security Act, shelved for political reasons in September 1995. The legislation would extend NAFTA-style tariff breaks to apparel stitched in Central America and the Caribbean. The Clinton administration is doing its part with a "No Sweat" campaign to counter the widespread perception of apparel maquiladoras as sweatshops. Clearly Washington feels there's more to runaway shops than idle threats to close down if workers vote to unionize.

The Neoliberal Laboratory

If we want to understand the actual significance of the maquiladora phenomenon, we have to start by recognizing that it can't be separated from what third world leftists have long since identified as "neoliberalism" - the package of structural adjustments, privatizations and "free trade" that the first world has been imposing on the third world for the past fifteen years.

The neoliberal project provides various traditional imperialistic ways for the world's elites to enrich themselves, such as looting natural resources through privatization or opening up new markets through tariff reductions. What is new about neoliberalism is a sort of primitive accumulation against capitalist and post-capitalist economic forms - against industrial production for the domestic market, against small-scale capitalist or cooperative agriculture (often the result of agrarian reform), and against the tenuous but crucial social safety net that has developed in many third world countries. …

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