La Jornada
November 19, 2001
By David Zuñiga

The maquiladoras still find the The Puebla-Panamá Plan and the "Marcha al Sur" Program unattractive, even after President Fox's invitation to contribute to the creation of a "great corridor" for the industrial, commercial and services sectors.

Rolando González Barrón, the national leader of the mauiladoras, explained that the availability of cheap labor in the southern Mexican states does not compensate for the loss of proximity with the US market and the north American transport infrastructure. The latter in fact allows to keep inventory costs at a minimum through "just on time" delivery.

Mr. Barrón made it clear that if the main concern was keeping labor costs down, labor-intensive maquiladoras (such as textiles and clothing) would move their factories to China, where salaries are as little as 15 percent of those prevalent in Mexico.

The main reasons why the South is not attractive for maquiladoras are the absence of multi-modal transport infrastructure and the lack of clear opportunities for private investment in the energy sector. As far as transport is concerned, Mr. Barrón stressed that maquiladoras have been willing to locate in the State of Yucatán because of the presence of a commercial port, which allows the shipment of exports to the USA via Miami.

Following the fears raised by China's entrance in the World Trade Organization (WTO), Mr. Barrón indicated that China may soon regain its market share in the world manufacturing market. It will do so at the expenses of countries like Mexico, that lost its advantage in terms of lower labor costs, which had been brought about by the 1994-95 currency devaluation. Whereas the average hourly wage in Mexican maquiladoras is 2.4 dollars, it is only 30 cents in Bangladesh, 40 cents in China and 60 cents in Sri Lanka. The lowest hourly wages in Central America and the Caribbean can be found in Haiti (90 cents), Trinidad and Honduras (1.3 dollars) Guatemala (1.4 dollars) and the Dominican Republic (1.5 dollars). The only country where wages are higher than in Mexico is Costa Rica, where average hourly wages are 2.6 dollars.

Mr. Barron finally considered how the fears raised by China's entrance in the WTO are somewhat exaggerated. While it is true that Chinese final products are up to 60 per cent cheaper that those of its competitors, it is also true that China will need to comply with environmental, commercial and labor regulations (related to children's work and maternity leave). Compliance with international regulations is likely to raise production costs in the Chinese manufacturing industry by at least 5 per cent.

Translated from Spanish by Adele Oliveri on November 28, 2001