ComercioExterior, Vol. 53, No. 4, Mexico, April 2003

ToBe or Not to Be a Maquila, Is That the Question?

Enrique Dussel Peters

Professorin the graduate economics program in the School of Economics at the National AutonomousUniversity of Mexico (UNAM) <dussel@servidor.unam.mx>.

For some decades now, and especiallyduring the 1990s, a vigorous analysis of the socioeconomic, labor and ecologicaldynamics (among many other aspects) of the maquila export industry (MEI) in LatinAmerica and especially in Mexico have been vigorously analyzed.1 These studies —by sector, region, company and groupings ofcompanies, among other categories— have explored important aspects of this industry,including its sector and region-based differences, its positioning at the local,regional, national and international levels, its labor and gender aspects, and itsconditions and challenges in terms of economic policies, to mention a few. Thesestudies have been relevant from many perspectives, especially in demystifying a seriesof topics, such as the relationship between MEI wages and national manufacturingwages, the increasing numbers of male workers in the maquila industry, the complexdecision-making in the companies involved, the global network and industrial organizationaffecting specific companies, and the opportunities and challenges faced in the respectiveterritories within the local, regional, national and international contexts correspondingto the respective MEIs.

Despite the above, the purposeof this article is to redefine the topic of the maquila export industry and its analysis.In the particular case of Mexico —and a similar, detailed focus should also be givento other countries— it is our opinion that since the 1990s, the way in which theMEI has been addressed is inadequate, from an academic and economic policy perspective.In other words, the MEI does not constitute a conceptual, economic or economic policycategory that serves to facilitate an understanding of the processes experiencedin Mexico’s manufacturing industry and a significant portion of its foreign trade.This is crucial, as will be seen below, from at least two perspectives. First, itis fundamental to distinguish conceptually between products and programs of economicpolicy, and socioeconomic processes. Second, and if we clearly indicate the rationalityof the processes of temporarily importing products for their subsequent exportation,this vision leads to important conclusions with regard to the potential of territorialendogeneity and the dissemination of these processes. Concentrating exclusively onthe maquila export industry, ignoring the limitations of a statistical nature aswell as others, leads to conclusions and expectations that are not very real, andin many cases, leads us to disregard the rationality of these activities.All of this is fundamental for developing proposals in the area of economic policy.

Based on these considerations,this article is intended to serve as some initial thoughts on these matters, andis divided into two sections. The first begins with some conceptual observations,and basically addresses the relevance of temporary imports for export in Mexico (asopposed to the maquila export industry), while contrasting products from socioeconomicprocesses and specifying the prevailing rationality and industrial organizationin temporary imports for export. The second section reaches some conclusions regardingthe considerations identified in the first section, and points to a number of aspectsaffecting policies relevant to territories where companies that temporarily importto then export have been established.

IS IT ENOUGHTO CONSIDER THE MAQUILA INDUSTRY IN AN ANALYSIS OF MEXICO’S ECONOMY AND FOREIGN TRADE?

This section is divided into threeparts. First, we will identify the conceptual aspects considered to be relevant withregard to the MEI, and the territorial relationship between local and global, orwhat can be referred to as glocal.2 Secondly, we willdescribe some tendencies in the MEI, and emphasize the export structure in Mexicoduring the 1993-2001 period with the objective of differentiating between the MEIand temporary imports for export. On the basis of these two sub-sections, we willaddress two specific topics in the third sub-section: a] the difference between theproducts and programs of economic policy, and socioeconomic processes, and b] theimplications of the rationality of temporary imports for export for the territorieswhere companies that carry out these processes locate.

Conceptual Notes

We can point to a few relevantaspects for understanding the increasing relevance of both the MEI and the territorialprocess between what is local and globalization.

1) There is growing consensus,from the perspective of even highly diverse theoretical tendencies, around the justificationfor private and public intervention in the respective economic activities. Socioeconomicconsensus and conditions achieved endogenously have made it possible to promote humancapital, education and technological development, but also institutions and the creationof comparative, absolute advantages in manufacturing activities through strategicpolicies. This is important in the framework of the prevailing economic and industrialpolicies since the 1980s, and their horizontality and neutrality. Also, the tendencyof economic units to export is, in the best of cases, not enough to achieve long-termeconomic growth, if the territorial aspects of endogeneity and systemic competitivenessare not contemplated.3

2) The other relevant aspectin the theoretical and conceptual discussion of economic and industrial developmentis in reference to the learning processes carried out in these activities and thesignificant repercussions for that development from the different forms of associatingand clustering of companies and economic activities.4 New forms of collective efficiency,5 industrial organization and intra and inter-company relations,as well as the effects of globalization on development processes at a regional scale,the clusters, and industrial districts and parks, the added value linkages in general,as well as the institutional forms of association all seem to play an increasinglysignificant role in the competitiveness of nations and regions.6 In fact, competition does not only occur between companiesas economic units, but increasingly between large agglomerations of inter-industryrelations or networks.7

This recent industrial reconfiguration—influenced by the new aspects of industrial organization— has effects not only onthe respective companies and nations (around their own integration in specific segmentsof the added value chain on an international scale) but also on the conditions andpotential for learning corresponding to the respective companies, regions and nations,according to their specific integration to added value chains.8 Generalizations at the national level are complex. The integrationof companies and regions —in the electronics industry, for example, into processesof packing and assembly of parts and components— will certainly have a differentpotential for economic and social learning than that experienced by the companiesand regions corresponding to segments of the added value chain related to researchand development (R&D) and the designing of parts, components and computer programsfor future generations.9

3) The aspects identified—intra-industry and intra-company commerce, the relationship between globalizationand regionalization, flexible specialization, and global commodity chains, as wellas the expanding openings in the markets of goods, services and capital —are thecause and the result, depending on the specific case, of the new strategies usedby transnational corporations, and international inter-company groups and networks,10 but also and increasinglyso, by smaller-sized companies.11 The different strategiesused by companies and corporations, but in particular by inter-company networks,have involved (at least since the 1980s) the implementation of mechanisms for reducingcosts and confronting the increasing diversity of the demand. Various methods forreducing unit time per product are especially noteworthy, and have implications forthe entire added value chain, however the intention here is not to consider the particularitiesof products and sector-based methods and processes. Just-in-time or Toyotism, initiatedby Japanese companies during the post-war period, and based on the reduction of generaland final-product inventories, is one of these mechanisms, although it has been surpassedto a significant degree in sectors such as the electronics and automotive industries,given internet purchasing, the exigent demand and competition based on prices andquality.12 In the same wayit is important to consider not only the diversity of the demand but also the increasingstandardization of processes in relation to the quality of final products, manufacturingin general, and the inputs required in the respective segments of the added valuechain, as well as international regulations in the areas of ecology and labor. Newelectronic means of communication have facilitated intra and inter-company relationsto a considerable degree. As a result, both suppliers and clients have been ableto significantly reduce their costs and times. The intensity, certainty and reliabilityof inter-company and intra-net relations have, from this perspective, increased ina way that was unimaginable until a few years ago.13 Thus, productivity (of work, capital or the totality of factors)only incorporates aspects from a small segment of the added value chain of commodities.In fact, in some cases14 the productive processcan, in the strictest sense, generate the lesser part of the added value, while thedesigning of parts and components, of machinery and services after the sale of theproduct can generate a far superior added value. These aspects of industrial organizationare significant since —in reference to the second point above— they also affect thetrajectory of companies, regions and countries in terms of their capacity for learningand integration into or exclusion from networks, global commodity chains, and specificindustrial organizations. From this perspective, linkages, integration in high addedvalue chains, and specific forms of integration in inter-company networks —as suppliers,producers or final distributors of companies, regions and nations— is fundamentalfor the territorial economic trajectory of the respective economic units.

4) Based on the above, theconcept of "systemic competitiveness"15 has been proposed for companies, regions and nations, anddepends on the interaction between the micro, meso, macro and meta levels. Thus,competitiveness is the result of dynamics that extend beyond the company. Althoughin some cases important advances have been made in some aspects of the macro andmicro levels, there are still multiple levels of competitiveness that require moreanalysis, support and promotion. Overestimating one of the aspects of competitiveness—the macro level, for example— is inadequate from a systemic perspective, even inthe best of cases. In fact, a perspective that only seeks the competitiveness ofcompanies and their direct link to the international market through exports can alsoremain far from providing positive results in the area of systemic competitivenessand the generation of territorial endogenous conditions.

From this perspective, the processof globalization initiated in the late 1960s and early 1970s, and understood as aresult of the socioeconomic and industrial organization tendencies interplaying betweena process of greater productive flexibility16 and global commoditychains,17 and a process ofrapid liberalization in the trade of goods and services, has territorial effectsat the local scale. And this is where the concept of glocal comes in: theprocess of globalization, in time and space, has local-territorial effects.

Industrial organization, socioeconomicconditions and the liberalization of the exchanging of goods and services make itpossible to segment the added value chain at an international level —a process whichwould have been inconceivable prior to the 1970s. Thus, territories become integratedin the global value chains in specific segments: in Jalisco, for example, the electronicsindustry carries out assembly and sub-assembly processes, while it conducts R&Dactivities in other territories. While both segments are part of the same globalvalue chain, the processes carried out in that chain are diametrically opposed andhave significant effects on added value, employment, development and technologicalinnovation, as well as on wages and control over the chain. Other territories thusbecome competitors, by segments.

Temporary Imports for Export Versus Maquilas?

Relevance of Maquilas and TemporaryImports for Export in Mexico’s Foreign Trade (1993-2001)

From the beginning of the liberalizationstrategy in 1988 up until October 2002, Mexico’s exports became the unquestionableengine for growth in the national economy. It is especially noteworthy, on the onehand, that the percentage represented by foreign sales with respect to the totalGDP had increased from levels below 10% in the early 1980s to nearly 30% by the late1990s.18 In order to understandthe dimensions of the structural change in this process, it is important to pointout the following:

a] Private manufacturing activitiesare the engine for growth in exports, with levels above 85% of total foreign salesbeginning in the second half of the 1990s, increasing from below 20% during the 1980s.

b] The United States has becomethe main country of destination for Mexican exports. While historically the US hasalways been the primary trade partner for its neighbor to the south, Mexican exportsto the US increased —during the 1990s and with the signing of NAFTA— from 76.66%in January 1991 to nearly 90% by mid-2002.

c] Within the manufacturing sector,as indicated in most analyses, the maquila export industry has become the primaryengine of growth in both total exports and manufacturing sector exports, with anincrease its participation from 28.91% and 42.76%, respectively, in January 1991,to 49.85% and 55.71% in July 2002.

Despite the above, it is importantto emphasize that, in accordance with the Harmonized System, trade, and concretely,exports, are divided into categories —and this is crucially important for the argumentbeing made in this article. Trade can be registered as definitive exports, maquilaexports and definitive exports with returns.19 This type of registeringis fundamental to understanding that, in addition to maquilas, there are other programsfor promoting temporary imports for export, such as the Temporary Import for ExportProgram (Pitex), and others.

From this perspective, and withthe exclusive intention of measuring temporary imports for export, including maquilas,we can look at the period from 1993 to 2001 and see that while the participationof the maquila export industry in Mexico’s total foreign sales was 44.38% on theaverage, temporary imports for export in general and including maquilas accountedfor 78.47% during the same time period, or in other words, 34.08% more than maquilaexports alone during the 1993-2001 period.

Processes or Products?

Why is the quantitative informationjust provided relevant? Why is it suggested to avoid overestimating the importanceof the maquila export industry from a conceptual, empirical and economic policy perspective?There are three relevant aspects here:

1) Exports by products.Trade, and concretely, exports, are classified according to the Harmonized Systemin 2, 4, 6, 8 and even 10 digits.20 By chapters (ortwo digits), for example, it is specified that since the 1980s and up until 2001the composition of exports varied a great deal: from oil exports to manufacturingexports, and in the case of the latter, a growing specialization in chapters linkedto products such as auto parts, automotive and electronics, among others. Thus, thesethree chapters concentrated 59.82% of the total exports in 2001 (see Graphic 1).

2) Products and technologicallevel. The previous aspect, specifically the analysis of exports by type of finalproduct, leads to some important conclusions. In the case of Mexico, for example,the profound structural change in exports according to composition of products suggeststhat the change is also one of technological model. When products are classifiedby type of technology,21 we can see thatin the early 1980s less than 20% of exports could be considered to be of medium orhigh level technology, however by the late 1990s, more than 60% of these sales correspondedto that level. Disregarding the difficulties in classifying products by their technologicallevel, some important conclusions can be reached with this type of analysis: specifically,not only have exports increased, but in particular their technological compositionhas increased. It could even be concluded that these products require and demanda high degree of innovation at a territorial level. There are critical implicationsfor evaluation and policy.

3) Socioeconomic processesand temporary imports for export. Why is it thought that this assessment is incorrectand far removed from any understanding of the socioeconomic processes of the specificproduct —and from a perspective of territorial endogeneity and systemic competitivenessthat includes segments in which the specific activity is involved? While it is unquestionablethat exports have increased significantly, as it has been argued, Graphic 3 reflectsa very different export structure than the one indicated in Graphic 2. From a perspectiveof export processes dependent on temporary imports, in which maquilas play an importantrole, but not the only role, it is stated that since the late 1990s more than 80%of foreign sales are linked to temporary import processes. This, as will be analyzedbelow, determines a series of aspects of the process that are carried out independentlyof the territory and the specific activity. Furthermore, and to the surprise of manyanalysts and government officials, oil plays a very significant role in the exportstructure: it generates an average of 42.28% of the definitive exports, and in someyears its participation has been more than 50%. This structure of export processes,which will be further expanded in the next section, is fundamental to understandingthe processes carried out in the export sector, independently of the product exportedor the program through which it is exported (the maquila export industry, for example).

Rationality of Temporary Importsfor Export

Companies that temporarily importfor export in Mexico —particularly in accordance with export-promoting programs,such as Altex, Pitex and the MEI— establish their plants in this country becauseof the following incentives:22 they do not payimport duties or added value tax; income tax is very much reduced and in most casesinsignificant, in zeros, or even negative23 –an aspect thatshould be very carefully analyzed in the future–24 and their imported products are required to enter Mexico temporarily.

The aspects just mentioned arehighly important for understanding rationality and the incentives under whichtemporary imports for export operate in Mexico, and as well, the incentives thatwould be necessary to increase the level of territorial endogeneity in Mexico, orfor integrating more national processes: duties for definitive importation can varyfrom 0 to 20%, added value tax is 15% and income tax can be up to 35%. In other wordsa company that temporarily imports for export and that would like to increase thelevel of national integration could face "disincentives" of more than 50%of production cost.

From this perspective we mightask if it is viable for processes that use temporary imports for export —not onlyMEI— to achieve greater national integration? By definition, and considering therationality of these processes, the answer is negative. Or, we might makethe following counterproposal: that local, regional and national institutions grantincentives that are at least as great as those conceded to temporary imports forexport.

The enormous dimensions of thischallenge in territorial economic policy have not been understood, in most caseson the part of both academics as well as government officials. The programs and proposalsin this regard often seek to generate chains of suppliers and networks between companiesthat temporarily import for export and others established in Mexico without consideringthese enormous barriers and disincentives. And the frustration at the failure ofintegration policies —in the case of the MEI, after 37 years— has also been enormous.In most cases these failures are to due to the lack of understanding of the rationalityof the processes involved in temporarily importing for export.

CONCLUSIONSAND CHALLENGES FOR ECONOMIC POLICY

The considerations presented here—and the intention is to develop them further in the future— have two objectives.First, to point out that the maquila export industry is a conceptual category thatis inadequate for understanding the structural change experienced in Mexico’s foreigntrade and economy. And secondly, to make a theoretical and empirical proposal regardingtemporary imports for export, with highly significant implications from a territorialperspective and a perspective of local, regional and national economic policy.

These considerations are basedon the belief that both a vision of products as well as one of export programs (suchas MEI) are inadequate for understanding the dimensions of the processes of importingfor export activities. Concentrating on a single program, such as the MEI, or onmanufactured or exported final products can lead to conclusions that are truly reckless.

1) For example, it is statedthat because high-tech products are involved —in other words, when Mexico has integratedcertain segments in the added value chains in the electronics, auto parts or automotiveindustries, for example— there are also processes that have a high degree of innovationor technology and even high added value and with significant learning effects. Theabove is incorrect ex ante from a perspective of processes: by definition—although with exceptions that will have to be analyzed in the future— temporarilyimporting for export involves relatively simple, primitive processes. And a greaterdegree of "territorial endogeneity" or national integration would makeit necessary to pay higher duties, added value tax or income tax. Failing to understandthis complex rationality of the processes involved in temporary imports forexport often reflects an ignorance of industrial organization and the structure ofincentives it generates. Academic or economic policy proposals that seek to increaseadded value or outsourcing in these processes, without a regional, sector-based study,as well as proposals from the public sector aimed at increasing national integrationwithout considering the incentives for those who benefit from these processes, areworthless, inappropriate and in particular, they fail to understand the reason forwhich these companies carry out their activities in a specific territory, in thiscase, Mexico. The frustrations of economic policy in this sense have beenenormous during recent decades, in many cases due to the incentives actually createdby other economic policies. Seeking to increase the level of national added valueby decree is also useless if incentives beyond those currently in place arenot generated.

2) Also, there are attemptsto identify the differences between the maquila export industry and the restof the manufacturing industry established in Mexico. This type of analysis is equallymeaningless if we consider that while 50% of Mexican exports correspond to the MEI,there are about 30% which correspond to a rationality of temporary importsfor export. The rest of foreign sales, not linked to these processes, are much morediscrete. By making this type of comparisons, we are incorporating on theside of "non-maquila" activities a very significant number of companiesand products that carry out activities that are very similar to those of the MEI.

3) The points made heredo not only reflect the need to understand the MEI —from an academic viewpoint— asa program that promotes, but also that there are important implications for economicpolicy. What have been the benefits from the MEI and from temporary imports for exportin Mexico? This is not a biased question, since for the moment there are no academicor public sector studies that integrally address this topic, and incorporate fiscalaspects,25 and aspects involvingduties, jobs, wages, ecology, gender and territorial development. This may seem surprisingsince the MEI has been operating for 38 years in Mexico.

Is it possible to increase thelevel of territorial endogeneity? What can be expected in the short, medium and longterm from temporary imports for export? The starting point for responding to bothof these questions is an understanding of the current rationality of theseprocesses, and not the paying of duties, added value tax or income tax, in practicalterms. The level of integration could be increased through greater incentives, althoughwith extremely high fiscal costs. We would have to imagine that all export activity—and with the objective of giving a similar treatment, also considering the restof economic activities in Mexico— would be excluded from being treated as permanentestablishments. What would be the source of income in the public budget be, if notfrom duties, added value tax and income tax?

Based on the above, it is believedthat the establishment of companies in Mexico that temporarily import for exporthas been positive in terms of jobs, wages and income in certain sectors and regionsof Mexico. The possibility of improving and increasing incentives are limited –duties,added value tax and income tax cannot be below zero, unless a direct subsidy is established—while in certain budget items such as training, government procedures, infrastructure,etcetera, considerable advances can surely be obtained. However, it is also importantto recognize that these measures will imply that assistance cannot be provided toother sectors and territories.

Lastly, we cannot ask for the impossible:the specific segments in the processes involved in temporary imports for export ascarried out in Mexico have not been established to achieve a greater degree of territorialendogeneity. The segments of greater added value are currently located in other territories.While it is possible that these segments could be transferred to Mexico or otherterritories, these processes are not currently carried out in the country, due tothe strong disincentives, in addition to the strategies used by companies and intraand inter-company networks. From this perspective, territorial policies should considerthe aspects descried here and conduct detailed regional and sector-based studieson the global and territorial processes carried out in the global added value chainand on the potential for the transfer —also with cost-benefit studies— of segmentswith greater added value.

Otherwise, it is deceiving foracademics as well as government officials to continue to dream about a process ofupgrading with the integration of segments into the chain of high added value, andto believe that a high-tech product also reflects processes of high-tech learning.Today temporary imports for export reflect primitive processes, with major incentives,with high-tech products and those of a lower technological level, and it appearsto be very complex, if not politically and fiscally impossible, to maintain theseincentives if the goal is to generate a greater level of national integration. Itwould seem to make more sense and to establish greater socioeconomic and territorialviability to rather focus on the rest of the productive apparatus established inMexico.

Footnotes 

1. Without attemptingto mention all the studies carried out, see the following: J. Alonso, J. Carrilloand O. Contreras, Trayectorias tecnológicas en empresas maquiladoras asiáticasy americanas en México, Productive Development series, No. 72, CEPAL,2000, pp. 1-52; J.L. Álvarez Galván and E. Dussel Peters, "Causesy efectos de los programas de promoción sectorial (Prosec) en la economíamexicana: ¿un segundo TLCAN para con terceros paises?", unpublished;Banco Nacional de Comercio Exterior, México: transición económicay comercio exterior, Mexico, 1997; R. Buitelaar, R. Padilla and Ruth Urrutia,"Centroamérica, México, República Dominicana: maquila ytransformación productiva," CEPAL Notebooks, No. 85, Santiago, Chile,1999, pp. 1-190; J. Carrillo, Condiciones de empleo y capacitación en lasmaquiladoras de exportación en México, El Colegio de la FronteraNorte and Secretaria del Trabajo y Previsión Social (STPS), Mexico, 1993;J. Carrillo, M. Miker and J.C. Morales, Empresarios y redes locales. Autopartesy confección en el norte de México, Universidad Autónomade Ciudad Juárez-Plaza y Valdés, Mexico, 2001; Comisión Económicapara América Latina y el Caribe, "México: la industria maquiladora,"CEPAL Studies and Reports, No. 95, 1996, pp. 1-237; E. de la Garza, Estrategiasde modernización empresarial en México, flexibilidad y control sobreel proceso de trabajo, Friedrich Ebert Foundation/Rayuela, Mexico, 1998; E. DusselPeters, Las industrias farmacéutica y farmoquímica en Méxicoy el Distrito Federal, CEPAL and Mexico City Government, Mexico, 1999; E. DusselPeters, Un análisis de la competitividad de las exportaciones de prendade vestir de Centroamérica utilizando los programas y la metodologíaCAN y MAGIC, Studies and Perspectives series, CEPAL-Mexico, No., 1, 2001, pp.1-57; G. Gereffi, "The Organization of Buyer-Driven Global Commodity Chains:How U.S. Retailers Shape Overseas Production Networks," in G. Gereffi and M.Korzeniewicz, Commodity Chains and Global Capitalism, Praeger, Westport, 1994, pp.95-122; E. Gitli (coord.), Estudios sobre el sector externo mexicano, UAM,Mexico, 1990; G. Gereffi, El Tratado de Libre Comercio de América del Norteen la transformación de la industria del vestido: ¿bendicióno castigo?, Productive Development series, No. 84, CEPAL, 2000, pp. 1-55; González-Aréchigaand R. Barajas (comps.), Las maquiladoras: ajuste estructural y desarrollo regional,El Colegio de la Frontera Norte and Friedrich Ebert Foundation, Mexico, 1989; B.Gonález-Aréchiga and J.C. Ramírez, Subcontratacióny empresas transnacionales, El Colegio de la Frontera Norte, Mexico, 1990; J.Katz and G. Stumpo, Regímenes competitivos sectoriales, productividad ycompetitividad internacional, unpublished manuscript, March 2001; M. Mortimoreand W. Peres, La competitividad internacional de América Latina y el Caribe.Las dinámicas macroeconómicas y sectoriales, Department of Productiveand Management Development, CEPAL, unpublished manuscript, 2001; C. Schatan, "Mexico’sManufacturing Sector Exports and the Environment under NAFTA," document preparedfor the North American Commission for Environment Cooperation, 2000; K. Unger, Competenciamonopólica y tecnología en la industria mexicana, El Colegio deMéxico, Mexico, 1985; S. Weintraub, L. Rubio and Alan D. Jones (eds.), U.S.-MexicanIndustrial Integration. The Road to Free Trade, Westview Press, Boulder, Colorado,1991; World Bank, Mexico. Enhancing Factor Productivity Growth, Washington,1998; and E. Zepeda Miramones and D. Castro Lugo, Restructuración económicay empleo en México, Friedrich Ebert Foundation, Mexico, 1999. Back to 1

2. E. Alvater andB. Mahnkopf, Las limitaciones de la globalización. Economía, ecologíay política de la globalización, Siglo XXI and UNAM, Mexico, 2002.Back to 2

3. For a detailedstudy, see E. Dussel Peters and J. Katz, "Diferentes estrategias en el nuevomodelo económico latinoamericano: importaciones temporales para su reexportacióny transformación de materias primas," soon to be published. Back to 3

4. Ch. Sabel, "Learning-by-monitoring:the Dilemmas of Regional Economic Policy in Europe," in OECD, Networks ofEnterprises and Local Development. Competing and Cooperating in Local ProductiveSystems, Paris, 1996, pp. 23-51. Backto 4

5. H. Schmitz,Collective Efficiency and Increasing Returns, IDS Working Paper, No. 50, 1997.Back to 5

6. H. Schmitz andK. Nadvi, "Clustering and Industrialization: Introduction," World Development,Vol. 27, No. 9, pp. 1503-1514, and M.J. Piore and C.F. Sabel, The Second IndustrialDivide, Possibilities for Prosperity, Basic Books, Inc., New York, 1984. Back to 6

7. P. Knorringaand J. Meyer-Stamer, "New Dimensions in Local Enterprise Cooperation and Development:From Clusters to Industrial Districts," contribution to ATAS Bulletin XI, "NewApproaches to Science and Technology Cooperation and Capacity Building," TheHague and Berlin, June 1998; D. Messner, The Network Society. Competitivenessand Economic Development as Problems of Social Governance, London, DIE, 1997;and M. Porter, "The Competitive Advantage of Nations," The Free Press,New York, 1990. Backto 7

8. M. Borrus andJ. Zysman, "Globalization with Borders: The Rise of Wintelism as the Futureof Industrial Competitions," in J. Zysman and A. Schwartz (eds.) EnlargingEurope: The Industrial Foundations of a New Political Reality, Internationaland Areas Studies, University of California in Berkeley, 1998, pp. 27-62. Back to 8

9. D. Ernst, FromPartial to Systemic Globalization: International Production Networks in the ElectronicIndustry, Working Paper, No. 89 (Berkeley Round Table on the International Economy,University of California in Berkeley). Backto 9

10. D. Chudnovsky,B. Kosacoff and A. López, Las multinacionales latinoamericanas: sus estrategiasen un mundo globalizado, Fondo de Cultura Económica, Mexico, 1999; andC. Garrido and W. Péres, "Las grandes empresas y grupos latinoamericanosin los años noventa," unpublished manuscript, Mexico, 1998. Back to 10

11. CEPAL, Lainversión extranjera en América Latina y el Caribe, CEPAL, Santiago,Chile, 2000. Backto 11

12. Since themid-1990s new intra and inter-company relations have been developed, in the electronicsindustry for example, and referred to as build-to-order with the intentionof operating in real time with suppliers, clients and companies that offerservices following product manufacturing. Back to 12

13. As a resultof recent forms of industrial organization in the electronics industry, the rotationof inventories, in specific cases such as Dell, have been reduced from weeks to days,and the goal is to reduce it even further to a matter of hours. Back to 13

14. G. Gereffi,"The Organization…," op. cit., pp. 95-122. Back to 14

15. K. Esser,W.D. Messner and J. Meyer-Stamer, Systemic Competitiveness. New Governance Patternsfor Industrial Development, German Development Institute, Berlin, 1997. Back to 15

16. M.J. Pioreand C.F. Sabel, The Second Industrial Divide, Possibilities for Prosperity,Basic Books, Inc., New York, 1984. Backto 16

17. G. Gereffi,"The Organization…," op. cit., pp. 95-122. Back to 17

18. Federal Branchof Government, Sexto Informe de Gobierno, Anexo Estadístico, Mexico,2000. Backto 18

19. Bancomext,Trade Information System-Mexico, Mexico, 2002. Back to 19

20. Ibid.Back to20

21. L. Alcortaand W. Peres. "Sistemas de innovación y especialización tecnológicaen América Latina y el Caribe," Productive Development series, No. 33,pp. 1-48, 1996; and E. Dussel Peters, "Un análisis de la competitividadde las exportaciones de prendas de vestir de Centroamérica utilizando losprogramas y la metodología CAN y MAGIC," Studies and Perspectives series,CEPAL-Mexico, No. 1, pp. 1-57, 2001. Backto 21

22. A descriptionand more in-depth analysis of each program is offered in E. Dussel, PolarizingMexico. The Impact of Liberalization Strategy, Lynne Rienner Publishers, Boulder-London,2000; and Secretaria de Economía, Mexico, 2001, web page <http://www.economia.gob.mx>. Back to 22

23. R. Schatan,("Régimen tributario de la industria maquiladora," Comercio Exterior,Vol. 52, No. 10, October 2002) calculates that by 2000 the maquila was paying a rateof –7.2% in income tax, or in other words, it had become a net receiver of subsidiesfrom the public sector. Backto 23

24. The topicis a complex one and requires serious analysis. In 2002, for example, the tax-payingregime for maquilas known as the exclusion to treatment as a permanent establishmentwas expanded for four years in terms of payment of income tax. In this case thesecompanies pay taxes based on 6.5% of costs and expenditures, or on prior agreementson transfer prices. In both cases the intention is to prevent companies from confrontingdouble taxation. Backto 24

25. It is notonly relevant to incorporate aspects of fiscal fraud committed by companies takingadvantage of the maquila and Pitex regimes, as made public during 2001-2003, butparticularly the income not received by the public sector due to incentives grantedto these companies, in contrast to other establishments in Mexico. Back to 25