Maquiladoras: the source of Mexico’s clothing manufacturing efficiency

At the forefront of Mexico’s apparel manufacturing growth are factories referred to as ‘maquiladoras’. These are companies that are responsible for the processing of manufacturing raw materials into finished products. In the past decade, over 600 thousand people were part of the country’s clothing and textile manufacturing workforce. Ultimately, ‘maquilas’ have become known for their duty-free and tariff-free labor. In 2019, this was reflected as sewing in garment factories or workshops were reportedly the lowest-earning laborers among manufacturing and industry roles in Mexico.

Mexico’s textile and apparel trade

In 2019, Mexico had the third-largest earning apparel industry in Latin America, surpassed by both Brazil and Argentina. Nevertheless, its Northern geographic location has played a strategic role in its global trade. As Mexico continues to rise as a leading textile importer, agreements and competition with leading textile exporting countries such as China incentivize the trade of raw materials at low costs. Then, once these materials are manufactured into finished products, these goods can then be in turn exported to countries like the United States, with which Mexico signed a new trade deal —the United States-Mexico-Canada Agreement (USMCA)— in 2020.

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