After 23 years, it’s time for a NAFTA do-over

The North American Free Trade Agreement (NAFTA) went into force on January 1, 1994. That week, I happened to be at the massive Consumer Electronics Show (CES) in Las Vegas, and NAFTA was the talk of the floor. It was the beginning of the rush for the border, where large manufacturing corporations had hopes of reducing labor costs while staying close to their largest consumer market—the United States.

Many of the large companies at CES were encouraged by the terms of NAFTA, especially the fact that they could send components over the border to Mexico, where their goods would be assembled, and shipped back into the United States with no tariffs. The age of the maquiladora—twin plant – was at hand, as consumer electronics firms, appliance and automotive OEMs and others set up plants in places such as El Paso, TX, and Ciudad Juarez, Mexico; Laredo, TX, and Nuevo Laredo, Mexico;  McAllen, TX, and Reynosa, Mexico; Brownsville, TX and Matamoros, Mexico.

Other maquiladora locations included Nogales, AZ, and Nogales, Mexico; even the small towns of Douglas, AZ, and Agua Prieta, Mexico, shared manufacturing. Larger cities such as San Diego, CA, and Tijuana, Mexico, as well as El Centro, CA and Mexicali, Mexico, became hotbeds for medical device manufacturing, industrial connector and electronics manufacturing. Injection molding companies from the midwestern and eastern United States established manufacturing plants in Arizona to be close to customers in Mexico.

Over the past four decades, first as a sales manager for a mid-sized injection molding and moldmaking company, then as a journalist for plastics industry trade publications and on trade missions with plastics industry groups, I travelled often to Mexico. What I saw on both sides of the border was amazing. Injection molding companies were setting up shop on the U.S. side to provide molded parts for U.S. OEMs who’d moved to Mexico for the cheap—and plentiful as well as skilled—labor. Back then, OEMs almost demanded that their suppliers move to the border. Many molders and a few moldmakers (not many, however) did just that to retain the business.

On the Mexico side, I saw huge manufacturing plants—some of which had been there since the 1960s and 1970s, like Ford Motor Co.—filled with somewhat older equipment and lots of young workers eager to become part of an emerging manufacturing economy. These workers were always friendly, smiling and excited to showcase the facilities buzzing with activity. Over the years the plants in Mexico changed and companies began replacing old molding equipment with new molding presses, some even outfitted with automation. That didn’t take away any jobs—in fact, it created new ones.

I wrote dozens of article about U.S. OEMs and their suppliers heading even further inland to places like Guadalajara that became home to Kodak, Hewlett Packard, Epson Printer, Lexmark Printer, Mattel and many others. By the early 2000s, they were looking at Mexico in the rear-view mirror and heading to China. Many of their molded parts suppliers, however, did not move across the Pacific. It would be another decade before Mexico began to see a manufacturing revival, as many OEMs

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