REYNOSA, Mexico–American-owned assembly-line factories known as maquilas that line the Mexican side of the border with the U.S. have been bracing for change since the election of Donald Trump. But not in the way you might expect. They clearly don’t want a border tax placed on their shipments to the United States, as the Trump administration has threatened. But they are embracing the possibility of an updated Nafta saying the current version makes it a harder to operate in Mexico compared to the U.S. It all has to do with time consuming paperwork.
Maquila managers and trade groups interviewed in both countries see regulatory uncertainty as an opportunity. “Nafta is 30 years old. It hasn’t kept up with today’s economy,” said Mike Myers, a Texan who runs a maquila owned by Metal Industries, a Florida company that makes vents for air conditioners and heating systems.
Maquilas are foreign-owned factories in Mexico, many American-owned, that produce goods for export. Mexican and Asian interests also own maquilas, which sprung up like mushrooms after the rain when NAFTA took effect in 1994. Maquilas leverage low labor costs in Mexico and duty free access to the U.S. market to produce everything from televisions to medical equipment to computer parts. Continue reading