Maquila & Free Trade
the maquila program
México’s Maquila Decree was established in the late 1950’s. It is also known as the Maquiladora program.
It allows raw materials, parts and equipment to enter into México duty/tariff free for assembly or manufacturing and then to have the finished goods exported back to their country of origin.
Twin Plant Operation
Twin plant program is a program in which the manufacturing of a product is carried out in plants located in two countries. The twin plants compliment each other in the manufacturing process. For instance one plant may be located in a country with low-cost labor to perform labor intensive work and the other plant will be located in a country with highly skilled labor to perform sophisticated work.
The USMCA Free Trade Agreement
- The United States-Mexico-Canada Agreement (USMCA) entered into force on July 1, 2020.
- It substitutes NAFTA.
- It's intended to promote balanced trade.