The name ‘maquiladora’ comes from the Spanish term for a payment in corn that a miller keeps

for milling. In the modern context it refers to factories which have been established in Mexico to
manufacture goods for cross-border trade, taking advantage of Mexico’s competitive advantages
vis-à-vis the United States.

Maquiladora factories in Mexico have experienced very rapid growth since the mid-1960s, when
they employed about 3,000 workers. This figure had risen to over 750,000 by 2000.

The north-western frontier of Mexicois known as the zona libre, or ‘free zone’. It consists of the
state of Baja California and certain cities in Sonora that function as free ports. Official Mexican
import substitution policies (high tariffs, import permits, and restrictions on foreign investment)
were not applied in the free zone.

The concept of free zones allowed US and Mexican entrepreneurs to develop their businesses
with little regard for the border between the two countries. These infant businesses in the free
zone, which manufactured in Mexico using inputs from the United States, set the stage for the
more formalised maquiladora factories that followed.

The completion of the United States interstate highway in the early 1970s reduced the cost of
transport in the United States. This made maquiladora manufacturing more competitive,
reducing the cost and time associated with bringing inputs from US factories and returning
finished products back to the United States.

NAFTA – the North American Free Trade Agreement, which links the United States, Canada and
Mexico – was signed in January 1994. Its purpose is to remove trade barriers between the three
countries over a 10- year period. Policies introduced under NAFTA have benefited maquiladora
manufacturing, creating additional demand for maquiladora plants.

Unions protest about the low wages, unsafe working conditions, and sexual and other forms of
harassment that take place.

In the 1980s Mexican and US border cities grew more rapidly than cities elsewhere in their
respective nations. Mexican cities in the border region grew at 42% compared to a national
average of 22%, whereas the United States border cities grew at about 25% compared to 10%
nationally.

There is increasing evidence that pollution of the air and water supply along the border during
NAFTA's first two-and-a-half years, is exacerbating health problems on both sides of the border.

Clusters of babies being born with anencephaly -- a rare neural tube birth defect in which a full-
term baby is born with incomplete or missing brains or skulls – was originally identified in both
Brownsville, Texas and Matamoris, Mexico in the late 1980s.

The incidents of anencephaly, along with other neural tube birth defects have increased since
NAFTA was implemented in January, 1994. In Cameron County, where Brownsville is located,
the Texas Department of Health reported 15 cases in 1994,up from 36 percent in 1993, when
11 were reported.

A 1995 study that attempted to correlate 12 years of industrial activity in Matamoros, Mexico
with the anencephaly rates in Brownsville, found that the prevalence of anencephaly is strongly
correlated to the level of activity found in the nearby Matamoris maquila zone. The report states:
"As maquila activity has waxed and waned, so has the anencephaly rate increased and
decreased in Cameron.
A study by the American Journal of Epidemiology which analyzed mortality data from the state
of Texas indicated that men working in certain occupations with high chemical exposure have a
greater risk of fathering a child with anencephaly.

While few anencephalic babies are autopsied, one conducted in Brownsville in 1991 revealed
that the baby had the pesticides DDE, DDT and Lindane -- all banned in the United States -- in
its tissue.

Lax environmental regulations combined with low wages continue to make the the maquiladora
region attractive to multinational companies and NAFTA has been unable to counterattack with
any success so far.

Institute reported that the average hourly wage in the U.S. then was $10.97 an hour compared to
the average of 75 cents an hour earned by maquiladora factory workers.

Despite the growing evidence that flourishing maquiladora industries are polluting the
environment and endangering the quality of life of citizens on both sides of the border, neither
government nor NAFTA officials have sought accountability from any of the industries operating
along the border.

A number of companies, including GM, have made out-of-court settlements with families who
live along the border and claimed that the operations of the companies caused their babies to
be born with neural tube defects. GM was the last of 88 companies to settle in lawsuits filed
originally in March of 1993 by a Brownsville attorney.

Policy estimated that approximately 100 million gallons of untreated sewage are dumped daily
into the Rio Grande River from Maquiladora free trade zones. While billions of dollars are
available for toxic cleanup along the border with Mexico, both U.S. and Mexican officials report
that not a single environmental project has gotten off the ground in NAFTA's two years of
existence.

During the NAFTA debate, the Clinton administration indicated that $8 billion would be spent
over a 10-year period to clean up the industrial pollution along the border. Yet, as of
September, 46 cleanup projects had been reviewed by the Border Environmental Cooperation
Commission.

Matamoros takes its water supply exclusively from the Rio Bravo (known also as the Rio
Grande), but has a potable water reserve of only three days due to the lack of storage
infrastructure. There are three drinking water treatment plants for the city and one of them is
badly deteriorated. About 12 percent of the population receives only intermittent service during
the day due to a lack of pressure in the pipelines.

Rapid growth has resulted in water and wastewater systems being inadequate to serve the
population. Matamoros has sewage coverage for 85 percent of the populace but the effluent is
not treated. Some of the Maquiladoras treat their industrial wastewater, but they are not the
biggest users. Residents of the city discharge around 15 million gallons of untreated wastewater
a day into open canals, from which it eventually flows into the Rio Grande.

Over the past few years, air pollution problems in the region have increased substantially. The
biggest pollutants are ozone, particulate and carbon monoxide. The maquiladora industry is the
biggest source of airborne pollutants for the city. One street lined with some of the most
hazardous industries is known as Chemical Row. In 1992, a group of families in Brownsville,
across the border from Matamoros, sued some of these maquiladoras. Matamoros has only
three government health and safety inspectors, who test air quality and industrial effluents only
once a year.

About 550 tonnes per day of solid waste are collected and disposed of in a dump site near the
city of Matamoros, while about 25 percent of the waste stream is collected clandestinely and
dumped illegally in over 250 sites. Municipal collection serves 90 percent of the population,
although 70 percent of domestic solid waste is collected irregularly. The existing dump site is
poorly controlled, resulting in raw waste being blown into nearby streams, landfill fires and
uncontrolled migration of leachate into the shallow groundwater aquifer