Maquiladoras are a type of low-cost factory located on the U.S.-Mexico border that are owned by foreign entities. These factories are utilized to assemble products and also to export them to different countries, primarily the United States. Companies utilize such factories for the advantages offered by the North American Free Trade Agreement, the USMCA, and the IMMEX Program.

Under the North American Free Trade Agreement (NAFTA), the regional industry is subject to certain tax advantages and the ability to acquire cheaper labor forces in Mexico. These labor forces are often limited to minimum wage and do not include job security and protections. The USMCA and IMMEX Program support the development of maquiladoras by offering low operating costs or debt-financing through deferred taxes or double taxation treaties.

The most common products constructed in maquilas are electronics, textiles, and apparel. These maquiladoras are beneficial to businesses due to the lower labor costs and the ability to export to other countries with no tariffs. This allows businesses to maximize their profits and produce goods at a lower cost than in the U.S.

However, not all is positive with maquiladoras -- many have been called into question for exploiting the labors forces working in them. Simply put, they take advantage of poorer wages and less adequate working conditions in comparison to the U.S., often in violation of several human rights and labor laws. Furthermore, certain maquilas also face other criticisms surrounding the poor quality of items being constructed as well as the high turnover rate due to the lack of job security.

In conclusion, maquiladoras are a viable option for foreign companies to capitalize on the cost-advantages provided by the U.S.-Mexico border. Unfortunately, these businesses are often associated with allegations of exploiting laborers and violating human rights laws. By carefully auditing factories to ensure adherence to working conditions and human rights laws, foreign companies can reap the benefits of manufacturing in Mexico with the assurance that their costs won’t come at the expense of workers.