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Wednesday, June 1, 2011

Stability in Mexico: The Maquiladora Industry

The Mexico Manufacturing Industry Information Center published news today stating the stability of the maquiladora sector in Mexico. For those that have never heard the term 'maquiladora', Mexico's maquila program was established in 1965 and its primary aim was to encourage foreign corporations to build factories along the U.S.-Mexico border. A maquila program entitles foreign companies to foreign investment participation in the capital -- and management -- of up to 100% of the manufacturing facility without the need of special authorization. It also provides the company with special customs treatment, allowing a duty free import of machinery, equipment, parts and materials.

KPMG Consultants Firm, a U.S. audit, tax and advisory services firm, considers that bouts of delinquency and organized crime have not caused foreign capital to leave Mexico. Luis Ricardo Rodriguez, responsible for International Trade and Customs with KPMG, assured that this is thanks to the maturity of the maquiladora industry. “Maquiladoras are still very attractive at the border; Tamaulipas, Chihuahua, Baja California and Sonora are preferred”, he said. Mr. Rodriguez added that investments with a significant impact on economic activity have not been withdrawn from the northern border.

Mario Luis Cortes, Professor at the Universidad Panamericana, stated that Mexico remains a strong pole of attraction for both foreign and domestic investment.

Sources: MexConnect, The Mexico Manufacturing Industry Information Center

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