Industrial Free Zones on US side of Border with Mexico

Industrial Free Zones on US side of Border with Mexico

1.       The purpose of this essay is to suggest the implementation of Industrial Free Zones on the US side of the Mexico Border.  The main purposes could be outlined as follows:

                                             I.            To partially regulate the influx of Mexican labor as to access US jobs within a regulated environment.   This in turn would -in principle- reduce the illegal immigration and could justify the implementation of harsher regulations, laws, etc.

                                            II.            To promote the creation of skilled labor (management, technical, etc.) for US workers therefore mitigating the national unemployment.

                                          III.            Area Development:  The areas destined for this activity would grow in local services, indirect employment and other benefits for the local communities along the border.

2.       The Framework for the implementation of this proposal is NAFTA.

3.       It can give US companies the chance of acquiring better labor costs without leaving the US, therefore remaining a “Made in the US” company.  Companies’ migration would still be within US borders instead of going overseas looking for cheaper labor costs, neutralizing therefore US Union’s arguments.

4.       The territory where this initiative can be developed is on all of the US territory bordering Mexico.  The initiative however can be exercised on States that are not in contact with Mexico but are through ocean water, accessible to other countries friendly to the US and are in need of creating jobs for their population, example: Florida.

5.       These “Zones” could work in coordination with existing free zones in other countries that are currently benefiting from trade agreements signed with the US.  These zones could do the manufacturing that requires the most labor input, while the “Zones” in the US can engage in more complex assemblies.

6.       The Mechanism Suggested for the implementation could consist of –but is not limited by- the following:

6.1    The enactment of a law by Congress that creates within the Labor Department, the Offices of Industrial Free Zones (this name could be changed to expand its scope, such as “International Free Zones” permitting therefore, service companies and agricultural companies also to make use of this initiative).

6.2    Within that law, there has to be certain amount of basic decision making capacity endowed to the States that are the possessors of the territory where the “Zones” are to be created and where the qualified personnel that will flow into these zones will likely proceed from -or eventually reside in-.

6.3    The law has to amend, create or develop Immigration law as to adapt possible status that permit temporary labor to be accommodated into the scheme presents by this initiative.

6.4    The State Department has to be involved, for there are issues that will have to be agreed with countries where this unskilled labor force proceeds from.  In some cases, those countries would have to amend their own laws so as to allow their nationals to travel while holding onto the privileges they hold while living in these free zones.

6.5    Income taxes could be shared between the US and the country where these workers proceed from.  A suggested rate could be 40% the US, 60% the country of origin.  All sales taxes originating in products sold for the internal consumption within these “Zones” will go to the States.

6.6    All raw materials going into these “Zones” will of course be free of taxes as well as all finished goods.

ROBERTO SOLÓRZANO

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