In Search of Decision: THE MAQUILADORA INDUSTRY IN MEXICO

Samuel Schmidt
ISBN 968-7845-16-3
First edition in English: 2000

Universidad Autónoma de Ciudad Juárez & The Flagstaff Institute
Soft Cover, 433 pages, US$50 plus postage

This landmark book covers the exciting decision to create Mexico's "Maquila" industry in 1965 -- beginning Mexico's global connection through exporting manufactured goods, creating jobs, earning foreign exchange, creating hope for the future. How and why did Mexico decide to use Economic Processing Zones (EPZs) -- 107 private industrial parks in Mexico's case, to attract foreign exporting companies, manage risk, identify with foreign investor motives? How did Mexico achieve global market recognition of its ability to produce and export high quality goods and deliver them on time? How did it achieve 1.4 million new export jobs in 3700 factories and another 2.8 million supporting jobs by the end of the 20th Century? That is an average of 120,000 new jobs per year for 35 years!

This book gives the inside story through interviews with the key decision makers from all sectors (government, industry, banking, labor, industrial park developers, investors) beginning with the early years at the Mexican border with the USA in the 1960s to the first 200,000 new jobs as the industry began expansion to the interior of the country. It covers those difficult times when bureaucracies, and top Ministers seeking the Presidency were in conflict, when companies failed to look ahead, when American unions obstructed, and government in many sectors was uncoordinated in executing policy.

Any of the 135 poor countries in the world trying to link in a practical way to global manufacturing, trading and services sectors will find the Mexican experience a helpful guide. Any economist, politician, factory manager and senior corporate executive will benefit from giving this book a good solid read!

As an unusual dividend, the entire 90 page 1964 prefeasibility study for the Government of Mexico by Arthur D. Little de Mexico S.A. de C.V. is reproduced in the Appendix – useful as a guideline for poor countries to begin planning their own EPZs.

Buy it – Read it -- Use the concepts and ideas

(Edited by Richard L. Bolin) Published semiannually since 1976, covers articles of interest on development of manufacturing in the Third World Countries to serve global export markets. Statistical issue, published each July, reviews U.S. Imports for the most recent 3 years from 200+ countries covering 120 product groups under incentive tariffs HTSUS 9802.00.60 (formerly TSUSA 806) and 9802.00.80(formerly TSUSA 807), GSP, CBI, Duty-free Semiconductors, Other Incentive Tariffs and Full Duty-Paid imports. Subscription cost for corporations and government agencies: US$150 per year. For individuals and non-profit institutions: US$50 per year. Back issues: US$40 each, postage extra. Write for free index of articles and authors. Library of Congress Card Number 77-649702, ISSN 0146-1958.

Third edition. Details key information about over 830 zones throughout the world listed by country with address, phone, fax, and contact person as well as principal activities, such as Manufacturing, Warehousing, Active Warehousing, Data Processing, etc. Published 1997. ISBN 0-945951-14-0, 313 pp. Soft Cover. US$25, postage extra. Write or fax for brochure.

The Flagstaff Institute, in cooperation with the World Free Zone Convention and the Jebel Ali Free Zone in Dubai, UAE, presents a selection of papers from the World Free Zone Convention on 7-8 June 2001, and the XXI WEPZA International Conference held on 9 June 2001, both in London.

"The free zone movement has always been part of the effort to facilitate trade. I see the reflection of the free zones in almost every part of the world actually as a testimonial to the importance of the free zones to facilitate free and fully competitive trade, which is one of the principles of the World Trade Organization"
- Dr. Supachai Panitchpakdi, Director General Designate, WTO

"I am very pleased to see on the platform here we have all three elements represented. The World Trade Organization (WTO) represents international agreements; The European Commission represents regional cooperation; and the World Economic Processing Zones Association (WEPZA) represents the drive to stimulate the local economic activity through local initiatives."
- Dr. Andrew Sentence, Chief Economist, British Airways

"Multilateral organizations need to take a more open attitude toward the use of special areas with alternative policies that help to teach countries how to interact in a global environment ....It is the presence of efficient policies and controls, and not an absence of policy and control, that define an effectrive zone."
- Robert C. Haywood, Director of WEPZA

109 pp. US$40, postage extra.

(Edited by Robert C. Haywood and Richard L. Bolin 2001) From labor-intensive manufacturing to very high-tech products, e-commerce and a new edge in global logistics, the Economic Processing Zone Administration (EPZA) of Taiwan has remained a leading force in economic development for 35 years. Staying relevant in times of change is a lesson every EPZ must learn. The lesson was driven home at the WEPZA XX International Conference of Free Zones and Economic Processing Zones (EPZs) at Kaohsiung, September 24-28, 2000 with over 150 participants from 25 countries. The lesson is that Taiwan created change through EPZA as its EPZs, wages, skills and capital increased. It moved over 70,000 production lines offshore to Southeast Asia in the past decade. This policy and action stimulated growth throughout the region resulting in further major growth of Taiwan's exports to the region and the globe, and raised EPZA's 35 year contribution to Taiwan's trade balance to US$30 billion or about 20% of the total. " More and more countries are recognizing a new paradigm of EPZs. While the old EPZ was often described as a static, labor-intensive, incentive-driven, exploitive enclave, the NEW EPZ paradigm is a dynamic, investment-intensive, management-driven, enabling and integrated economic development tool." - Robert C. Haywood, Director of WEPZA, 2000. ISBN 0-945951-21-3, 133 pp. Soft Cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1999) Free Zones and Export Processing Zones are not going to disappear, but they are changing. Multinational zones are appearing across borders on several continents and zone services are multiplying. The reasons for the pace-setting growth of EPZs were explained and projected at the WEPZA XVIII International Conference of Free Zones and Export Processing Zones held at Flagstaff Arizona, USA, September 13-16, 1998. Over 150 zone managers from 42 countries gained knowledge of customs rules and EPZ policies in Europe, learned how Jebel Ali Free Zone at Dubai achieved ISO 9002 quality status, heard the generally positive results of the ILO study of EPZ labor relations in 20 countries, noted the special advantages for small and medium industry in EPZs and reviewed details of 10 new member zones from China, Croatia, United Arab Emirates, Sudan, Yugoslavia, Kazakhstan and Kyrgyz Republic. Robert Haywood's analysis of the changes called for greater urgency in WEPZA's role to inform supranational organizations of the growing ability of EPZs to combat poverty in developing nations. ISBN 0-945951-20-5, 233 pp. Soft Cover. US$40, postage included.

(Edited by Richard L. Bolin, 1998) Issues facing Free Zones in the next century include 1.) Investment and Services are going to become more important than trade in goods. 2.) There will be population declines in the developed Western Countries. 3.) There will be an increase in regulations despite the fact that there will be a decrease in traditional trade barriers. 4.) A move towards Market Economies. 5.) A move toward Regionalism. 6.) Free Zones as solutions to Devolution Pressures in many countries. Thus Robert Haywood introduced WEPZA's 17th International Conference at Istanbul, Turkey October 5-8,1997 hosted by WEPZA Member Turkish Free Zones and attended by 213 participants from 38 countries. In the year in which the Free Zone at Gdansk, Poland celebrated its 1000th birthday, the newer zones, busy networking through WEPZA to serve the global market, are living proof that zones are here to stay. ISBN 0-945951-19-1, 117 pp. Soft Cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1997) Thirty years experience shows that successful EPZs evolve upscale to higher technologies and profits. How can governments accelerate this process? Global managers of Export Processing Zones, Free Zones, Science Parks, and User Industries debated this question with Government officials at Tianjin, People s Republic of China, October 20-24, 1996. Steps recommended to governments include: 1) enable the market environment, 2) share profits with inventors, 3) avoid the brain drain, 4) nurture centers of excellence in management and technology, 5) link zones to local enterprises, 6) encourage zones to move to new services, 7) financial services, 8) shelter program services, especially for smaller firms, 9) recognize that technology transfer is not a free commodity, and 10) stay flexible within a core policy. ISBN 0-945951-16-7, 105 pp. Soft Cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1996) A new multinational linked system of Free Zones and Export Processing Zones is proposed in Central Europe/CIS to improve trading and export manufacturing possibilities and reduce present uncertainties in the system of selling, transporting, and delivering goods to Western Europe and overland to/from Asia. Free Zones linked by common rules and communications can speed processes, minimize difficulties of transactions, reduce costs of transport and storage, simplify customs procedures and achieve a higher level of transaction security which will attract further financing of trade and investment. These memoirs of a round table at Vienna, Austria, April 14-16, 1996 under the sponsorship of the World Export Processing Zones Association (WEPZA) and System International Foundation of Budapest, Hungary cover papers and discussions of experts and zone managers from 16 countries. ISBN 0-945951-15-9, 122 pp. Soft Cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1996) The role of Export Processing Zones in newly formed Free Trade Areas, such as MERCOSUR in South America, will be set by government policy. Will the zones manufacture for the Global Market providing the benefits of employment, higher skills and hard currency earnings, or will they operate primarily as storage areas for imports? To shed light on this issue managers of EPZs from 18 countries shared their views with over 200 delegates at the XV International Conference of the World Export Processing Zones Association (WEPZA) at Rio de Janeiro, Brazil in October 1995. The conclusion is that countries with successful EPZs credit value added in their zones thus reducing duties on products entering the domestic market. ISBN 0-945951-12-4, 92 pp. Soft Cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1995) The newly emerging markets of the Middle East, Africa, West Asia, Russia and the CIS can be served efficiently from the market center free zones of the Mediterranean, Gulf and Indian Subcontinent located midway along the world's main shipping routes. The future of cargo transport by sea, air and rail between Asia and Europe was described to delegates from 37 countries at the XIV International Conference of Free Zones and Export Processing Zones of the World Export Processing Zones Association at Dubai, U.A.E. in December 1994. Managers described details of export processing zones from Spain, Syria, Jordan, Turkey, Dubai UAE, Pakistan, Sri Lanka, Bangladesh and the Nakhodka Free Economic Zone on the Pacific Coast of Russia. ISBN 0-945951-11-6, 101 pp. Soft Cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1994) The North American Free Trade Agreement among Canada, the United States and Mexico presents a dilemma to Third World countries presently enjoying access to the United States market. What will be the likely effects on their present and future trade? How will they continue to participate, especially in competition with Mexico? Managers of Free Zones and Export Processing Zones from 23 countries exchange ideas with NAFTA negotiators and experienced trade managers at the WEPZA XIII International Conference of Free Zones, Juarez, Mexico, October 1993. ISBN 0-945951-10-08 83 pp. Soft Cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1993) Creating and operating successful Export Processing Zones and Free Zones involves a balancing between public services and infrastructure and private incentives, flexibility and marketing efficiency. How much of the task should be public and how much private depends on each country's culture, objectives, current situation and market prospects. (Based on discussions among experts and EPZ managers from 22 countries at the WEPZA XII International Conference of Free Zones, Colombo, Sri Lanka, 1992) ISBN 0-945951-09-04 84 pp. Soft Cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1993) European Community integration forced changes in EC free zone policies at the same time that new free zones emerged in Eastern Europe and the CIS. These memoirs present a detailed analysis of policy, regulations, and operating ideas of how to use zones for selling into the EC as well as bartering with the East. Based on discussions among experts and EPZ managers from 23 countries at the World Export Processing Zones Association XI Conference of Free Zones, Cadiz, Spain, 1992. ISBN 0-945951-08-6. 97 pp. Soft Cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1992) Implications for Free Zones and Export Processing Zones of the movements towards regional bloc trade in East/West Europe and North/South America were the theme of the X International Conference of the World Export Processing Zones Association at Curacao, Netherlands Antilles, November 1991. Speakers from Russia, USA, Slovenia, Switzerland, Hong Kong, Taiwan ROC, El Salvador, and Venezuela, among others, presented papers and answered questions. ISBN 0-945951-07-8. 84 pp. Soft Cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1991) The IX International Conference of the World Export Processing Zones Association at St. Paul, Minnesota, USA, June 3-6, 1991 focused on how Export Processing Zones and Free Zones are now being used to improve the efficiency of serving global markets for both manufacturers and retailers. Issues of market strategy, logistics, finance, sourcing, quality and legality are explained by top managers and professionals. The concept of free zones as vehicles for countries to control the degree of openness they desire in international trade and global manufacturing is explored with specific examples from the Soviet Union and the United States of America. ISBN 0-945951-06-X. 142 pp. Soft Cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1990) These memoirs of the VIII World Conference of Export Processing Zones (Free Zones) which attracted participants from 30 countries to Barcelona, Spain in May 1990, cover papers on Technology Transfer, Management Training, and the Future of Export Processing Zones. Sponsored by the World Export Processing Zones Association (WEPZA) and the Consorcio de la Zona Franca de Barcelona, the conference papers included presentations on Nissan's just-in-time auto manufacturing; the future of zones and customs regulations in the European Community; the ideas for educating zone managers on a continuing basis; and the world transport situation. As is customary in WEPZA conferences, the provocative questions and thoughtful answers following the papers are presented in detail. ISBN 0-9459951-05-1. 127 pp. Soft Cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1990) Sourcing from local manufacturers by EPZ firms enhances domestic exports, improves technology transfer, and results in a positive image of the EPZ in the community. But it requires a willingness to compete in world markets on the part of domestic industry and sustained supportive government policies. These are the conclusions of the World Export Processing Zones Association (WEPZA) from 23 papers of a conference of leading export processing zone managers at Kaohsiung, Taiwan, Republic of China, in which Taiwan and Korea experiences were featured and compared with those of Mexico, Jamaica, Sri Lanka and others. ISBN 0-94595-04-3. 174 pp. Soft Cover. US$40, postage extra.

(By Robert C. Haywood and Richard L. Bolin, 1989) This analysis of Mexico's largest coastal state bordering on the USA examines the accelerating march to the Mexican interior of the maquila industry.  Now accounting for 20% of the output of maquila in Mexico, the interior is contrasted with the border using 5 Sonora cities in which the characteristics and motivations of managers and workers were studied in several independent interlinked surveys.  Interviews with politicians, community managers, workers, plant managers and home-office executives shed light on future needs as the interior continues its growth relative to the border. Elements of recommended strategy for Sonora to pursue include developing a vision of the future of the industry and the State to the year 2010. ISBN 0-945951-03-5. 97 pp. Soft Cover. US$40, postage extra.

(By Robert C. Haywood and Richard L. Bolin, 1989) Not published until 1989, this is the pioneer 1984 survey of the largest Mexican Border City and its U.S. twin city, El Paso, Texas, and the impact of Production Sharing on them after twenty years of successful promotion to create 70,000 direct export jobs in the maquila industry. Includes detailed data summaries from interviews of managers of maquila plants and workers and formulates an industrial development strategy to the year 2000 moving to higher technology, higher productivity through education, training, and product- oriented exploitation of Juarez' comparative advantage. This is a particularly useful base point for continuing studies of the Mexican Maquila success for manufacturers, businessmen, economists, and government policy-makers. ISBN  -945951-02-7. 61 pp. Soft cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1989) Integration of Export Processing Zones into a world network to improve the opportunity for small manufacturers and developing countries to share the low-cost production of goods on a global scale. EPZs are islands of "Free Zone" efficiency in a sea of red tape enabling rapid import/export of materials and machinery to process goods for world markets.  Proceedings of a conference in December 1988 at Barranquilla, Colombia, of the World Export Processing Zones Association (WEPZA) at which nine EPZ managers from Korea, Taiwan, Philippines, Jamaica, Curacao, Mauritius, Spain, Pakistan, and the USA discuss with five noted experts the organization, finance, marketing, transportation, communications and operations in EPZs in formal papers followed by informal and revealing question-and-answer sessions. ISBN 0-945951-01-9. 125 pp. Soft Cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1988) A global perspective on Production Sharing -- the economic integration by stages of the productive process across international borders. Mexico's maquila industry with 3200 companies providing 900,000 export jobs in 1997 is an example. Details of a 1987 conference bringing together speakers from Japan, Holland, Korea, Philippines, the USA and Mexico under the direction of Peter Drucker who coined the term "Production Sharing" in 1977. ISBN 0-945951-00-0. 156 pp. Soft Cover. US$40, postage extra.

(Edited by Richard L. Bolin, 1986, reissued 1997) First time investors in Export Processing Zones will benefit from the 22 papers presented here for ideas and experience of many of the most successful early EPZs on how they grew in spite of difficulties they faced. Of particular note are Motorola Inc.'s suggestions for EPZ success, International Parks Inc.'s risk management plan for startup of a new EPZ and the Nogales Shelter Plan, an innovative promotion idea. The international conference and 3rd General Assembly of the World Export Processing Zones Association was held at Flagstaff, Arizona, USA September 11-15, 1985 with 78 persons from 20 countries attending. WEPZA was converted from an organization of governments (the UNIDO format of 1978) to an organization of export processing zones, public or private. The WEPZA Secretariat was given a permanent location at Flagstaff under the management of The Flagstaff Institute, a non-profit research institution. ISBN 0-945951-18-3, 64 pp. Soft Cover. US$40, postage extra.