Certified Production & Operations Manager (POM) 2025 – 400 Free Practice Questions to Pass the Exam

The term maquiladora is most closely associated with free trade zones in Mexico. These are specific areas within the country where manufacturing facilities operate under favorable trade conditions, allowing for the import of materials duty-free and the export of finished goods with minimal tariffs. The origins of the maquiladora system can be traced back to the 1960s, primarily to encourage foreign investment and create jobs along the U.S.-Mexico border.

In these zones, companies often take advantage of the lower labor costs available in Mexico, while still accessing the larger markets in the United States and Canada. This economic arrangement is beneficial for both manufacturers looking to reduce costs and for the Mexican economy, which gains jobs and foreign investment.

The context of the other choices highlights relevant aspects of the maquiladora concept but does not capture its primary meaning. While manufacturing outsourcing refers to the practice of relocating production to lower-cost areas, it is a broader term that encompasses various global practices, not strictly confined to the maquiladora framework. Labor exploitation can occur in many manufacturing environments but does not define the maquiladora system itself. Similarly, export processing zones represent a global concept of designated areas for manufacturing but are not exclusively synonymous with the specific regulations and arrangements of maquiladoras in Mexico.