The Integration Of U.S. And Mexican Economies

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The Integration of U.S. and Mexican Economies
“The overall pattern of U.S.-Mexico trade and investment began to change radically nearly a decade before NAFTA with Mexico's unilateral trade liberalization. This ushered in a dramatic growth in the two-way trade of manufactured intermediate goods that has continued and matured since the implementation of NAFTA” (Ojeda). There has been a large increase of United States and Mexican trade since the early 1980s. “A large part of Mexican imports have become predominantly linked to the demand for Mexican exports rather than to fluctuations in Mexican domestic demand” (Ojeda). Compared to the rapid increase of Mexican Maquiladoras, this compelling new trade has matured even faster then expected. As other regions in Mexico begin to take on this strategy, this type of trade will continue to grow and increase production throughout Mexico.
One of Mexico's primary sources of foreign exchange are the Maquiladoras. “Maquiladoras are Mexican assembly plants that manufacture finished goods for export to the United States” (Columbia Encyclopedia). For the most part, these maquiladoras are typically ran and owned by corporations that are not in Mexico. “They take advantage of plentiful low-cost Mexican labor, advantageous tariff regulations (lessened somewhat as a result of the North American Free Trade Agreement), and close proximity to U.S. markets to produce such items as home appliances and automobiles” (Columbia Encyclopedia). “Maquiladoras have been around since the late 1960s” (Spener), which started out as a very small industry. “The maquiladoras were initially almost entirely located in the Northern border region of Mexico. They grew dramatically after Mexico substantially revised its economic regulations concerning foreign investment in the early 1980s” (Columbia Encyclopedia). The maquiladora industry grew at a steady pace of about 20% annually, and began t...