Globalization and the Border

The Border Google Maps

El Paso, Texas U.S.A. Google Maps Ciudad Juárez, Chihuahua México

El Paso is home to Foreign Trade Zone No. 68. Google Maps There are 320 “ Maquilas ” in Juárez.

El Paso is home to Foreign Trade Zone No. 68. “ Maquila” like “Tequila”? Google Maps There are 320 “ Maquilas ” in Juárez. Foreign Trade Zone? Huh?

El Paso is home to Foreign Trade Zone No. 68. “ Maquila” like “Tequila”? Google Maps There are 320 “ Maquilas ” in Juárez. Foreign Trade Zone? Huh? “ ” Maquila” like “Tequila”?

El Paso is home to Foreign Trade Zone No. 68. “ Maquila” like “Tequila”? Google Maps There are 320 “ Maquilas ” in Juárez. Foreign Trade Zone? Huh? What does this have to do with the border? “ ” Maquila” like “Tequila”?

El Paso is home to Foreign Trade Zone No. 68. “ Maquila” like “Tequila”? Google Maps There are 320 “ Maquilas ” in Juárez. Foreign Trade Zone? Huh? What does this have to do with the border? … immigration? “ ” Maquila” like “Tequila”?

To better understand the border, one way to look at it is through the lens of Globalization.

To better understand the border, one way to look at it is through the lens of Globalization. Oh no! What’s with the big words?!

Let’s keep it simple.

Let’s keep it simple. Globalization is not a new phenomenon.

Globalization circa 1800. New World

With improved transportation …

With new communication technologies …

Globalization today.

Our world has become more integrated .

Our World has become more integrated . interdependant

Our World has become more integrated . interdependant accelerated .

Our World has become more integrated . interdependant accelerated . For those seeking a formal definition… …

“ Globalization is the acceleration and intensification of interaction and integration among the …. Globalization 101 , Issues in Global Education

“ Globalization is the acceleration and intensification of interaction and integration among the …. people Globalization 101 , Issues in Global Education

“ Globalization is the acceleration and intensification of interaction and integration among the …. people corporations Globalization 101 , Issues in Global Education

“ Globalization is the acceleration and intensification of interaction and integration among the …. people corporations governments of different nations.” Globalization 101 , Issues in Global Education

Corporations, people and governments are linked together in the process of globalization.

Let’s examine the pieces for a moment.

A corporation’s goal is to maximize profit.

A corporation seeks the best labor pool to produce its product.

A corporation considers transportation costs.

A corporation seeks tax advantages.

A corporation seeks tax advantages. Wait! What’s that?

Foreign Trade Zones allow goods to cross national boundaries with no taxes owed. Raw material can be imported into a country, worked on by labor and then exported for further work, or as a finished piece. For example:

Cloth enters Mexico No import taxes owed.

Labor sews into garments.

Garments shipped out again. No export taxes owed.

$ Total Traded in 2006 between Juarez and El Paso NAFTA, the North American Free Trade Agreement, is the world’s second largest free trade agreement.

It established Foreign Trade Zone No. 68 in El Paso. Google Maps

So what does this mean? Google Maps

$ Total Traded in 2006 between Juarez and El Paso $33 billion in trade crossed the El Paso - Juárez border in 2000 El Paso – Juarez World Trade Center

$ Total Traded in 2006 between Juarez and El Paso $33 billion in trade crossed the El Paso - Juárez border in 2000 That’s some big business! El Paso – Juarez World Trade Center

Let’s turn to the Juárez side of the border. Google Maps

Juárez has become a major industrial hub with over 320 factories, called “ maquilas .” Google Maps El Paso Juarez World Trade Center

However, Mexico does not have the same health, safety and worker protection laws that have developed in the U.S. over time . Maquiladora Health & Safety Support Network

Many housing areas around maquilas have no infrastructure (such as electricity).

These industrialized outposts are called “ colonias ,” the colonies.

Colonias remind us that Globalization is the interrelation of …

Governments receive no (or, lower) import and export revenues on goods processed in foreign trade zones.

Governments receive no (or, lower) import and export revenues on goods processed in foreign trade zones. Why would a government agree to make less money in tax income?

Governments receive no (or lower) import and export revenues on goods processed in foreign trade zones. Why would a government agree to make less money in tax income? Especially a government in a poorer country, like Mexico? Don’t they need all the money they can get?

Jobs No government revenue Jobs and the economic possibilities that jobs bring are deemed to outweigh forgone tax revenues.

Jobs No government revenue It is believed better jobs will stimulate further economic growth through increased consumption, individual tax revenues and direct investment.

There is a metaphor that describes this belief: Global commerce acts as a rising tide…

… lifting all boats to economic prosperity over time.

People in Mexico

Meet Miguel

Meet Miguel Really?

Miguel is fictional. But, he represents some very real people.

23% of Mexico’s workforce is engaged in agriculture. NationMaster.com, 2000-2001

Mexico has lost 1.5 million agricultural jobs since NAFTA went into effect. Mexico’s corn famers see their livelihoods wither away” San Francisco Chronicle July 31 , 2006

1.5 Million farmers out of work. “ Mexico’s corn famers see their livelihoods wither away” San Francisco Chronicle July 31 , 2006

Miguel has heard about jobs that pay more in maquilas on the border. The average hourly wage in a maquila during 2007 was $2.35 an hour. El Paso Regional Economic Development Corporation

Being unsure if he will find work. Miguel leaves his family until he can find a job and send for them to join him.

He migrates to Juárez.

Only to find he is one of many.

Job creation in maquilas hasn’t been what was expected. Mexico has been competing with other nations in providing labor and foreign trade zones.

Miguel has gone from underemployed to unemployed. He’s left his family. He is hungry. There is a need for his labor in farms further north in the U.S..

Miguel has gone from underemployed to unemployed. He’s left his family. He is hungry. There is a need for his labor in farms further north in the U.S.. I think I see where this is going…

Miguel has gone from underemployed to unemployed. He’s left his family. He is hungry. There is a need for his labor in farms further north in the U.S.. I think I see where this is going… He’s going to migrate north to the U.S..

Not necessarily, but you are starting to see the connections.

There is an alternate metaphor to describe globalization. Instead of a rising tide, globalization is depicted as a… race …

race to the bottom

In the race to attract corporations and create jobs, people and governments undercut each other. race to the bottom

In the race to attract corporations and create jobs, people and governments undercut each other. race to the bottom So, which is it? A tide that brings prosperity, or race to the lowest wages?

That’s for you to explore on your immersion trip as you learn more about border related issues.

We as people create and maintain these relationships.

We as people have the power to change these relationships.

To learn more about globalization check out these resources: “ The Lexus and the Olive Tree ” - Thomas Friedman “ The World Is Flat ” - Thomas Friedman “ Globalization and Its Discontents ” - Joseph E. Stiglitz “ No Logo ” - Naomi Klein