A maquiladora (Spanish: [makilaˈðoɾa]), or maquila (IPA: [maˈkila]), is a factory that is largely duty free and tariff free. These factories take raw materials and assemble, manufacture, or process them and export the finished product. These factories and systems are present throughout Latin America, including Mexico, Paraguay, Nicaragua, and El Salvador. Maquiladoras date back to 1964, when the Mexican government introduced the Programa de Industrialización Fronteriza ('Border Industrialization Program'). Specific programs and laws have made Mexico's maquila industry grow rapidly.

From 1942 to 1964, the Bracero program allowed men with farming experience to work on US farms on a seasonal basis, and its end ushered in a new era for the development of Mexico. The Border Industrialization Program (BIP) began in 1965 and allowed for a lowering in restrictions and duties on machinery, equipment and raw materials. Before this program, PRONAF, a national border program for infrastructure developments like building roads, parks, electricity, water, building factories, and cleaning up border cities, helped to improve situations along the US-Mexico Border. With BIP, foreign firms were able to use factories built under PRONAF to import raw materials and export goods for a cheaper cost than in other countries. One of the main goals of the Border Industrialization Program was to attract foreign investment.

In 1989, the federal government put in place specific procedures and requirements for maquilas under the "Decree for Development and Operation of the Maquiladora Industry". Following a debt crisis in 1980, the Mexican economy liberalized and foreign investment increased. Factory jobs began to leave central Mexico, and workers followed the jobs from central Mexico to the maquilas in the north and on the border. In 1985, maquiladoras overtook tourism as the largest source of foreign exchange, and since 1996 they have been the second largest industry in Mexico behind the petroleum industry.

With the introduction of NAFTA in 1994, Northern Mexico became an export processing zone. This allowed multinational corporations from the US to produce products cheaply. Corporations could use a maquila to import materials and produce a good more cheaply than in the US by paying Mexican laborers lower wages and paying less in duties. Mexicans work for approximately one-sixth of the U.S. hourly rate. During the five years before NAFTA, maquila employment had grown at a rate of 47%; this figure increased to 86% in the next five years. The number of factories also increased dramatically. Between 1989 and 1994, 564 new plants opened; in the five years following, 1460 plants opened. However, the maquiladora growth is largely attributable to growth in US demand and devaluation of the peso, not NAFTA itself. In the 1970s, most maquiladoras were located around the Mexico–United States border. By 1994, these were spread in the interior parts of the country, although the majority of the plants were still near the border.^{[citation needed]}

A 2011 Federal Reserve report indicated that the maquiladora industry affects U.S. border city employment in service sectors. Although the maquiladora industry suffered due to the early 2000s recession, maquiladoras constituted 54% of the US-Mexico trade in 2004, and by 2005, the maquiladora exports accounted for half of Mexico's exports. In the 2000s, the maquila industry faced competition due to rise of other countries with availability of cheap labor, including Malaysia, India, and Pakistan. The biggest threat came from China's Special Economic Areas.

During the later half of the 1960s, maquiladora industries rapidly expanded geographically and economically and by 1985, had become Mexico's second largest source of income from exports, behind oil. Since 1973, maquiladoras have also accounted for nearly half of Mexico's export assembly. Between 1995 and 2000, exports of assembled products in Mexico tripled, and the rate of the industry's growth amounted to about one new factory per day. By the late twentieth century, the industry accounted for 25 percent of Mexico's gross domestic product, and 17 percent of total Mexican employment.

Since globalization and physical restructuring^{[citation needed]} have contributed to the competition and advent of low-cost offshore assembly in places such as China, and countries in Central America, maquiladoras in Mexico have been on the decline since 2000. According to federal sources, approximately 529 maquiladoras shut down and investment in assembly plants decreased by 8.2 percent in 2002 after the imposition of countervailing duties on Chinese products, not available in North America, that were part of the electronics supply chain. Despite the decline, over 3,000 maquiladoras still exist along the 2,000 mile-long United States–Mexico border, providing employment for approximately one million workers, and importing more than $51 billion in supplies into Mexico. Research indicates that maquiladoras' post-NAFTA growth is connected to changes in Mexican wages relative to those in Asia and in the United States, and to fluctuations in U.S. industrial production. As of 2006, maquiladoras still accounted for 45 percent of Mexico's exports. Maquiladoras, in general, are best represented among operations that are particularly assembly intensive.^{[citation needed]}

Women entered the labor force in Mexico in large numbers in the latter half of the 20th century. Devaluations of the peso in 1982 and 1994 pushed many Mexican women into the labor force. Between 1970 and 1995, 18% more women were part of the working force, and many of these women were working in maquila factories. Women looked for work in factories because they could get jobs with few credentials and receive on the job training. Men working in maquilas were given positions of supervision, management, engineers, and technical jobs, while women were relegated to low-skill jobs. Young women tended to be hired more often than older women, but it depended on the circumstances of the job and type of factory. However, young single women often ended up in factories with better working conditions, like the electronics plants, while older women and mothers worked in more dangerous apparel factories.