It also was designed to establish effective procedures for the resolution of disputes and promote further trilateral, regional, and multilateral co-operation. It was an agreement that was designed to keep up with the emerging liberalism in the world economic system after the end of the cold war. Mexico, having gone through multiple recessions and with its biggest trading partner, the United States, it could not afford to be left out of a trade agreement. Maquiladoras are assembly plants located in Mexico that are most of the time owned by foreign investors instead of Mexican companies. These maquiladoras import the parts from other countries and just assemble the finish product.
Mexican law allows the companies also to bring in machinery and equipment from the outside.
The supplies that are needed to create the finished product are not taxed since they are destined for export. The finished product containing the supplies has to be exported out of Mexico within a six-month period. The tariffs that apply to the export from Mexico of the finished product is the value added to the product according to it s processing in Mexico. This includes the value of the labor, electricity, other parts, etc. The maquiladoras can bring as many foreign workers as they want but hourly wageworkers have to be Mexican.