International Trade:

Commerce Department Conference on Mexico's Maquiladora Program

NSIAD-87-77BR: Published: Apr 3, 1987. Publicly Released: Apr 21, 1987.

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In response to a congressional request, GAO reviewed the Department of Commerce's participation in the Expo-Maquila 86 conferenceand reviewed Commerce's compliance with the 1987 continuing resolution Congress passed to prohibit participation in this and similar events.

GAO found that: (1) Commerce staged the conference to promote Mexico's Maquiladora Program and give U.S. firms the opportunity to obtain information about establishing and operating maquiladora plants; (2) Commerce alloted $166,842 for direct project costs from a special account established for its reimbursable program, which it financed from exhibitor fees; (3) although Commerce anticipated a revenue surplus, its proceeds were reduced after it turned the event over to a public relations firm in compliance with the act; (4) the program has evolved beyond its initial objective of producing simple components under sub-assembly operations, and some plants now use sophisticated techniques requiring a higher skill level; (5) the limited ability of Mexican firms to supply raw materials, a shortage of skilled labor, and overburdened communications services constrain the program's continued development; (6) although Commerce could use private sector funds to circumvent the act's prohibition, there was no indication that it intended to do so; and (7) Commerce's interpretation of the prohibition resulted in staff participation in a Caribbean Basin Initiative conference similar to Expo-Maquila 86.

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