A maquiladora (mak-eel-uh-Dora...like the explorer girl) is a factory that’s free from the economic shackles of tariffs and duty fees in Mexico, but is run by another country, where it also exports its products (usually the U.S.). Maquiladoras came about when the U.S. said, “Hey Mexico, we’ll give you tariff and tax breaks on these factories if we can run them and bring the goods into our economy to sell to our folk...using your cheap labor! How’s that sound?” To which Mexico said, “Bueno.”
While the term was originally specific to factories in Mexico very close to the U.S. border (since the goods were then shipped over the border to the U.S.), the term has been used more broadly to describe the relationship in a maquiladora-like setup.
Maquiladora means “assembly plant.” Maquiladoras make up well over half of Mexico’s exports, and employs over a quarter of their labor force. Obviously, America’s benefitting from maquiladoras too, or else they wouldn’t be doing so well.
Related or Semi-related Video
Econ: What is Outflow of Capital?2 Views
And finance Allah shmoop What is the outflow of capital
All right well you are a stunningly deep sleeper One
day you fall asleep on the beach just before the
tide comes in When you wake up covered in you
know seaweed and surrounded by a flopping fish You find
that everything you brought to the beach was washed out
to the sea Your towel's your beach umbrella You're cooler
with the mango juice and the cops you know made
out of coconuts And your wallet Yeah that thing with
that stack of cash you brought for vacation Well capital
outflow in a nutshell Well in a coconut shell anyway
Riel life capital outflow refers to the same concept but
only on a national level That is assets move out
of the country They flow out Investors pull their money
out of one place because they think their cash will
be better off somewhere else You're an investor in a
Su Mak farm in the small Mediterranean nation of Slovenia
The king dies and his dopey son takes over the
throne So yeah you're sure the new king's policies will
ruin the country's economy and run everything businesswise into the
ground So you closed down your Su Mak farm and
you buy another one in a neighbouring country with a
more stable future in a way smarter Qing Capital Outflow
out of Slovenia and into its neighbour That's what's happening
Well Capital outflow doesn't just involve foreigners moving money from
one overseas investment to another Citizens of a country might
move assets out of that nation if they think they'LL
be safer somewhere else So let's go to China It's
a country with a restrictive government and not a huge
respect for the rule of law for its individuals Like
if you're a rich person in China well you'LL want
to get as much of your money out is you
can most likely anyway move it somewhere else somewhere safer
somewhere less scrutinizing So you take what cash you can
and you look for investments elsewhere outside of the restrictive
rules of China So you buy an apartment in Paris
and maybe a small castle with little golf course in
Scotland and then you come back around and buy a
cotton candy factory with corn in Iowa Or maybe you
start looking at ASU Mac Farm along the Mediterranean Yeah 00:02:09.365 --> [endTime] just not inched Slovenia
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