ARIZONA & MEXICO

Early maquiladoras were limited to the Mexican border zone. Later the Mexican government allowed
maquiladoras to be established anywhere in Mexico, while NAFTA gradually eliminated duties on
manufacturing products, extending the maquiladora privileges to other exporting companies. Today
the majority of maquiladoras are still owned by U.S. companies (“parent” companies), but many are also
owned by Mexican national companies, as well as by a host of other companies from Asia and Europe.
These parent companies are taking advantage not only of lower production costs in Mexico, but
foremost of the proximity to U.S. markets.
Major sectors in the early maquiladora program were electric, electronic and textile industries. In 1990
the Mexican government initiated a parallel program for export promotion, known as PITEX, which
largely benefited the motor vehicle assembly. Subsequently, the automotive industry became one of
Mexico’s most important manufacturing sectors. Since 2006, the Maquiladora and PITEX programs were
merged into a single program for the promotion of exports, known as IMMEX (Industria Manufacturera,
Maquiladora y de Servicios de Exportación).
IMPORTANCE FOR ARIZONA’S ECONOMY
The economic benefits of the Mexican IMMEX sector to Arizona’s economy are generated through two
main venues. First, a number of Arizona’s companies own and operate maquiladoras, mostly in the
neighboring state of Sonora. Through a production-sharing relationship, which is based on lower labor
costs in Mexico, Arizona-based parent companies stay competitive in national and global markets.
Second, the IMMEX sector also provides opportunities to a host of other Arizona-based companies to
participate in a supply chain by providing goods and services to operations in Mexico (Figure 2).
Figure 2: Supply Chain Model
Source: teachtools.com 1/20/16
41 • ARIZONA & MEXICO • ARIZONA TOWN HALL • APRIL 2016