ICFTU:
Behind the Wire
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WEPZA:
Comments and Questions
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| Environment
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| 121. Environmental legislation is also relaxed for foreign investors.
| 121. No special provisions for foreign investors exist.
Mexican and foreign investors get the same treatment. This has nothing to do
with the EPZs.
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| 122. A report published in 1990 by the US Labor Department
recognises that health and safety conditions "are more than problematic" in the
Mexican maquiladoras and that "infrequent inspections by the authorities as
well as the failure to apply environmental rules have provoked an increase in
the potential risk of accidents" (Workers' Rights in Export Processing Zones",
a special edition of Foreign Labor Trends, 1990, US Department of Labor, Bureau
of International Labor Affairs). According to John O'Connor, Chairman of the
National Toxics Campaign, research along the US-Mexico border has found "the
highest levels of exposure to toxic waste ever found in the world. We have seen
families drinking water stored in petrol drums and children playing in toxic
rivers". (Dollars and Sense, October 1992).
| 122. The 1990 US Department of Labor report as quoted here
does not mention EPZs except in its title. Would that possibly mean that the
confusion between maquiladoras and EPZs already noted in the ICFTU treatise
also exists in the US Department of Labor? Some maquiladoras are in industrial
parks and some are not. Most industrial parks these days are concerned about
waste management. The firms outside the industrial parks depend on the domestic
waste system usually.
Mr. Connor is not with the US Department of
Labor, but the reader might think so the way the comments are run together. The
toxic river may have been in Tijuana, which is nearly overcome with human waste
from the huge population growth and the inability of government to solve the
problem. Waste management is a hot topic with NAFTA and will eventually
improve.
Of course the reader will see that family
water stored in petrol drums is not a function of EPZs at all. The statement
that the US-Mexico border has the highest level of toxic waste in the world is
of course also absurd. One need only think of Chernobyl or the sabotage at
Bhopal, India to recognize that this is an irresponsible statement.
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| 123. And this pollution gets exported:
according to the British weekly "The Economist" (12 December 1992), some
studies show that toxic fumes discharged into the atmosphere by certain
maquiladoras, notably in Matamoros, and the use of pesticides in agriculture,
may be the cause of the abnormally high levels of babies born with birth
defects on the other side of the border in the US town of Brownsville.
| 123. Maquiladoras in EPZs or outside them? Agricultural
pesticides are used on the farm, not in EPZs. Is this quasi-scientific
speculation or are there data?
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| 124. Ten percent of US maquiladoras based in Mexico, which
took part in a study by the Colegio de la Frontera Norte (Tijuana, Mexico)
mentioned legislation on the environment as one of the reasons for leaving the
United States, and 17 percent of them considered it an important factor.
| 124. Did the Colegio estimate whether this 10% were now
polluting in Mexico? Another way to say this is that 90% of investors don't
think the environmental legislation is even worth mentioning as a reason to
move, and 98.3% don't consider it important. Thus the bulk of investment in EPZs
have nothing to do with this very weak environmental issue.
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| 125. A side agreement on the environment and working
conditions had to be added to the North American Free Trade Treaty (NAFTA)
before it was approved by the US Congress. Both Mexico and Canada were opposed
to the inclusion of these themes in the principal text, fearing a loss of
sovereignty and the imposition of American views in problems that have nothing
to do with trade or borders.
| 125. Agreed, good reasons for opposition also.
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| 126. The final result was the creation of the North American
Commission for Environmental Cooperation based in Montreal. This trinational
commission has the right to oversee the application of national laws and impose
penalties if it can prove negligence by the authorities. The penalties are not
heavy, and the procedure for reaching that stage is deliberately complicated,
but the commission does have the right to publish its conclusions.
| 126. Sounds like good policy. It is also not directly related
to trade as many of the polluting industries are for domestic consumption. At
least all three countries recognize that the environment is not a function of
EPZs
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| 127. The "accused" country is not obliged to abide by its
recommendations, but the plaintiff does have the possibility of imposing import
restrictions to an amount equivalent to the estimated damage. This procedure is
considered by the three NAFTA members as "a transfer of sovereignty" in the
interests of the inevitable globalisation of trade. To give enterprises and
communities the means of cleaning up their environment, specifically in the
border area between Mexico and the United States, the North American
Development Bank was created. More than 22 projects have already been submitted
to it for financing.
| 127. Certainly not a complaint about EPZs in the last few
paragraphs -- in fact a good description of what should be done whether EPZs
existed or not.
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| The effects
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| 128. In 1985, there were 789 maquiladoras. The sector provided
direct employment for 211,968 Mexicans. By June 1995, there were 2,747 maquila
enterprises directly employing 676,518 workers (2.25 percent of a working
population of 30 million).
| 128. At the beginning of 1997, it is estimated that there are
900,000 export workers in 3200 maquiladora factories.
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| 129. The impact of the maquiladoras on trade and national
labour markets can be calculated very simply, as suggested by Philip L. Martin:
if the average worker in a maquiladora is from a family of five people, then
3,382,590 people (3.75 percent of the Mexican population, calculated at 90
million in the 1990 census) benefit from the wages earned by the worker. In
1990, the latter earned nearly $3,800 per year, well above the national average
of $2,300.
| 129. This estimate of 3,382,590 does not include the two
additional jobs created in Mexico in support of each direct worker, so the
number could in fact be closer to 10 million. Unfortunately the methodology of
this calculation is suspect since, once one family member has a job, other
members find out how good it is. Hence, many siblings and parents work in the
industry.
The higher pay in maquiladoras (including
those in EPZs) compared to average pay levels is consistent with evidence
elsewhere. So much for the claim of exploitation.
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| 130. In addition, as each direct job generates
between 2 and 3 indirect jobs, employment in the maquiladoras is responsible
for the creation of between one million and one and a half million jobs in the
service and housing sectors, etc. These figures only reflect one aspect of the
situation, however. The maquiladoras are developing without any real knockon
effect on the rest of the industrial fabric, while in Taiwan and Korea, the
number of local enterprises has multiplied, which has contributed to the
transition from assembly activities to manufacturing the original product. In
fact 95 percent of suppliers to the maquiladoras are foreign.
| 130. The evidence shows that there are 2 indirect jobs created
in border cities by each maquila job. That would imply that over 10% of the
Mexican population now benefit from the existence and success of the
maquiladoras.
The lack of linkages to local industry in
Mexico has been observed since the beginning of the program. It is due to the
government's policy of maintaining high protective barriers on domestic
industry, and the insistence that the maquila be located away from the
industrial centers of Mexico. Combined with high cost domestic transport the
domestic industry was unwilling to compete with world
suppliers in quality, delivery or price. In the 1970's a two-week
government-sponsored effort in Mexico City by 600 maquiladoras to seek
suppliers among 2000 Mexican companies resulted in not a single sale. This will
change as NAFTA takes effect.
It is nice to see that ICFTU now sees Korea as
a success along with Taiwan. Both these countries increased linkages by opening
the domestic market and access to its manufacturers who managed to compete at
global prices.
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| 131. The Tijuana Economic Development
Corporation has sought to emulate this Asian model since 1972. When questioned
by "The Economist" about Mexico's slow development, the Corporation's director,
Enrique Mier y Teran, explained that one of the major obstacles was the
individual attitude of many Mexican bosses, who despite their competence did
not seek to become owners or co-owners. The attitude of the Mexican banks,
reluctant to make loans on the basis of future income, also helps to explain
this phenomenon.
| 131. Foreign companies finance their own maquiladoras. Mexican
sub-contractor maquiladoras receive financing from customers. Mexican Banks
have charged double and triple-digit interest rates at times because of
financial problems of the country since 1970, making it impossible for local
firms to compete consistently in export markets.
Despite Enrique's view and the above problems
there are a large number of locally owned Maquilas.
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| 132. There is another factor holding back
growth: the poor transport network. Sending a container by sea to Los Angeles
from Taiwan works out cheaper than sending it by lorry from Mexico City to
Tijuana! If railways and ports were to develop a better infrastructure, the big
Mexican suppliers, based mainly in the centre of the country, would be able to
enjoy a larger share of the profits from the maquiladoras.
| 132. We see again that the problem is not a function of the EPZs.
NAFTA is beginning to change this. Air, rail
and highway nets between the Mexican center and the northern border are now
well established and privatization of rail will help, but port development will
take time and cost money. Small Mexican ports with few shipping lines calling
will have difficulty competing with huge West Coast US ports for some years.
Meanwhile, supplies can reach maquiladoras, as in the past, via US
infrastructure.
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| 133. Despite efforts by the Mexican
administration, it is still three times more complicated to set up business in
Tijuana than in the United States, and no less than two thirds of the paper
mountain is attributable to the bureaucracy of Mexico City.
| 133. This statement, although the measure is suspect, gives
reliable proof as to why EPZs are important -- 10 million jobs based on making
it easier to establish a business and a limit on bureaucracies paperwork. The
ICFTU should be encouraging such innovation.
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| Human capital
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| 134. Enrique Mier y Teran does not ignore the responsibility
of the employers in the slow development of the border zone. The workers have
no job security to encourage them to stay, he notes. As soon as they become
operational, they leave for another maquiladora.
| 134. Development has hardly been SLOW. High turnover rates
among new unskilled workers have been endemic since 1980 as the success of
maquiladora development dried up the border labor market. Contrary to the
statement, workers found employment security --they could quit and be assured
of getting another job when they needed it. This has been a problem for
companies not workers. The government has fixed the entry-level wage at the
border at levels only slightly above those of central Mexico making it
difficult for companies to compete for labor. To give a 10% increase above the
minimum wage to a worker costs the company about 25% under Mexican rules.
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| 135. "Every morning" says Mier y Teran, "every owner gets up
and asks themselves "how can I get the most out of my workers today?" instead
of "how will I increase my productivity today?" According to Jeffrey A. Hart,
professor of Political Science at the University of Indiana and author of
"Maquiladorization as a Global Process", there are some encouraging signs of a
change in attitude among employers.
| 135. We've heard that song before. See our paragraph 112.
Unfortunately there has been no sign of change among Trade Unions.
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| 136. Multinationals such as Apple and IBM sponsor technical
schools in the towns where they are based, to ensure that some of their
applications are included in the education programme. Hart also discovered that
new technologies are no long tested first in the multinational's country of
origin, but are transfered as a priority to the maquiladora in Mexico. More than
three quarters of workers in the maquiladoras are female. The border zone has
for a long time been the only region in Mexico where women dominate the labour
market, even in traditionally male sectors such as the manufacturing of
electrical appliances. In 1979, the proportion of women in this sector, in the
border area, was 82.4 percent, as compared to 36.3 percent at the national
level. Equal opportunities is not really the reason for this situation.
According to the ILO document, "The maquiladora industry in Mexico", employers
are seeking a specific socio-demographic profile: women aged between 15 and 24,
single, childless, and who have completed their primary education, because they
"appreciate" their physical resistance and their "willingness" to endure long
hours of monotonous work in very rudimentary conditions.
| 136. All companies provide training to their employees all the
time. Independent or government-operated technical schools in Mexico are
strongly supported by EPZ user associations. The new CAST activities supported
by the World Bank are very helpful, as are the spreading campuses of Monterrey
Tech, which now serves 30 Mexican cities. The discovery of Professor Hart that
untested technology is being sent to Mexico first is without parallel. It takes
years in some industries for proof to reach the home office that offshore
factories are qualified to undertake testing. For a factory to be qualified
under ISO 9000 is a "badge of honor". We find Political Science Professor
Hart's "discovery" simplistic and ludicrous!
The writer is back at 1979 again. Women in
Mexico were not in the industrial labor force in 1965 when the maquila program
began - as in the USA. But women in the border region discovered that they,
too, could share in the income generated and flocked to the garment and light
electronics assembly plants early. But by 1980 the border labor market dried up
and more men were employed in proportion. In recent years women fill about 55%
of the jobs and men 45%. There is no important difference between the sexes in
productivity. Both have gone to school and learned how to upgrade to
higher-tech jobs.
The ILO paper quoted was by someone who never
held an industrial job! Conditions were never "rudimentary" in Mexican
parks.
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| 137. Another advantage is that single women
often live in the parental home, which means they are less likely to seek the
highest wages. Having no children reduces absenteeism as well as the need to
replace them on maternity leave. Their educational level primary education and
their youth the maquila is often their first job guarantee both the basic
ability needed for the repetitive tasks they are expected to perform and great
discipline. As trade union membership is low among young workers, it is also
easier to dismiss them. This maquila system is therefore tantamount to a
strategy of exploitation that the law allows the employers to perpetuate. The
employment crisis explains why complaints by human rights and workers'
organisations have little effect. There are between 80 and 90 candidates for
every vacancy. Those who have a job consider themselves lucky, and say that it
is "preferable to be exploited in a maquiladora than to not be exploited at
all."
| 137. Is this what trade union writers are reduced to?
Theoretical balderdash about motivation, demographics, parental support of
unmarried women -- in a mishmash of explanations as to why unions are not
successful. In paragraph 129 these same children were seen to be supporting, on
average, five people in their family. Rarely these days do 90 people appear to
get one job. The labor market is tight in the border regions with all factories
offering places for qualified operators by hanging banners outside their
buildings.
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| Illegal immigration
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| 138. A survey carried out in 1990 by Mario M. Carillo Huerta
among 1,400 workers (62 percent women, 38 percent men) has shown that 72
percent of workers came from urban areas and had emigrated in order to find a job.
At the time of the survey, 84 percent of those interviewed did not have any
intention of emigrating to the United States.
| 138. One would get very similar results in Mexico City. About
70% of Mexico's population is urban so that's where people come from. Also shows
that the majority of the people are not living at home, since they emigrated in
order to find work.
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| 139. The analysis of Philip L. Martin, economist at the
University of California Davis and an expert in migration, suggests however
that there is a correlation between the sex of the workers in the maquiladoras
and the quantity of immigrants using them as a "springboard", working there for
a short time before emigrating to the "other side" of the Rio Grande. According
to several surveys, it would seem that, even though it only concerns a tiny
percentage so far, "springboard" migration is increasing and can be linked to
the increasing proportion of male workers in the maquiladoras.
| 139. The Rio Grande goes East from Juarez to Matamoros. There
is a continuous land border from Juarez West to Tijuana. Because there are two
long-term growth trends this does not imply causality.
So it is admitted that the percentage of men
in maquiladoras is increasing. We thought they were just "exploiting" women who
lived at home! It must be hard to write an article when the facts keep
contradicting the premise.
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| 140. When men do not find or lose their job in
a maquiladora, they tend to stay in the region and seek informal employment, of
which there is plenty thanks to the activities of the maquiladoras, while
waiting for an opportunity to move on to the United States.
| 140. Data? Or idle speculation? In our interviews with maquila
workers one of the problems for the employers was that workers wanted to return
home for family events, not cross the border.
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