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Riding the Ripples of a Border Boom

Foreign factories are moving deeper into Mexico, reviving poverty-stricken hamlets. Thanks to the global economy, a Maya denim worker can buy his family a washing machine.


MOTUL, Mexico — Camilo Manrique has only a sixth-grade education, but he can quickly reel off the giants of Yucatan history. There were the ancient Mayas, who built soaring pyramids. There were the 19th century hemp barons, with their vast haciendas. And there is Eddie Bauer.

"The maquiladora is the biggest thing that's happened to us," said Manrique, strolling out of a giant factory where modern Maya Indians stitch jeans for Eddie Bauer, the Gap and Banana Republic.

He hopped on his bike to head home through this sweltering village, where horse-drawn buggies rattle past stone houses with thatched roofs.

"Now, with what you earn, you can buy the necessities," he said.

This blue-jeans oasis represents a striking change in Mexico. Fueled by the North American Free Trade Agreement and increasing globalization, maquiladoras are booming. And increasingly, the assembly plants that once symbolized the U.S.-Mexican border are appearing in the country's interior.

This "second wave" is reviving towns throughout Mexico--from old woodworking cities to Mayan-speaking hamlets--providing an alternative to unemployment or, sometimes, illegal migration to California.

But if the factories are helping Mexicans, they could hurt some Americans. With lower wages and lower turnover than at the border, these maquiladoras could tempt more and more U.S. companies to move production to Mexico, especially in such labor-intensive industries as clothing manufacturing.

"The number of [Southern California] companies looking down there has grown dramatically in the last couple of years," said Raul Hinojosa, a UCLA professor who has studied the California garment industry. So far, however, only a limited number have relocated.

Since the 1994 signing of NAFTA, which lowered tariffs, maquiladora jobs in Mexico have soared almost 60%, to 860,000.

Many plants are still going up in border cities like Tijuana, poised to import U.S. parts, assemble them and quickly ship them back. But nearly 1,000 maquiladoras--about 40% of the total--have now set up shop away from the congested border, according to the U.S. economic consulting firm Ciemex-WEFA.

'Green Gold' Fades

Perhaps nowhere has the impact been greater than in the Yucatan, in Mexico's south.

Just consider Manrique's case. His family, like other local Indians, long cultivated hemp, the local "green gold," which was made into rope. But with the rise of synthetic fibers, the industry collapsed. Three-quarters of the region's 53,000 hemp workers have lost their jobs in the past five years.

For a while, Manrique searched for construction work in the city of Merida. But the hourlong bus commute ate up whatever meager amount he was able to earn. Increasingly desperate, he considered joining his uncle, a car wash attendant in Buena Park, Calif. ("He has an immense house--and it's not even cardboard," Manrique boasts.)

But then came Monty Group, a Hong Kong-owned maquiladora that produces jeans for the United States.

These days, Manrique sorts pre-cut denim from 7:15 a.m. to 5:45 p.m., earning $28 a week plus benefits.

Back at the one-room shack he shares with his wife and two daughters, he proudly showed off a new double bed and washing machine, bought on an installment plan. Next, he's going to buy cinder blocks to replace the walls--currently, thick black cardboard lashed together with wire and Coke-bottle caps.

"There is a lot of work, and they don't pay us much," admitted the 24-year-old worker, who earns the minimum wage. Even with overtime, he still doesn't make enough to pay for the minimum food, energy and household needs of a family of four, according to Mexican academic studies. "But what else is there?" the worker asked. "You're here in Motul."

Factories such as Monty are a far cry from what Mexican and U.S. officials envisioned when they set up the maquiladora program in 1965. Then, the idea was to create jobs at the border, especially for Mexican farm workers returning from the United States.

The maquiladoras were allowed to import materials and components duty-free. Tariffs were paid only on the value added to the products.

In the ensuing years, the maquiladora industry exploded as competition from Asian imports forced U.S. firms to seek cheaper sites for manufacturing. Today, globalization and their low wages continue to drive the growth in maquiladoras. But NAFTA is also playing a role.

The treaty, for example, eliminates quotas on textile exports to the U.S., making Mexico more attractive than the Caribbean for many clothing manufacturers. And it requires that products benefiting from it--from cars to television sets--be made mainly of North American parts.

"Maquila-type plants that were located in the Far East are now being moved to Mexico" to assemble components that go to other factories, said John Christman, a maquiladora expert at Ciemex-WEFA. Asian-owned plants are especially thick in Baja California, including Tijuana.

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