Factories built by US companies in Mexico near the US border to take advantage of lower labor costs in Mexico

• A. Export Processing Zone
• B. Free Trade Zone
• C. Offshore Assembly Plant
• D. Maquiladora

Answer: (D)

These factories are maquiladoras—manufacturing plants in Mexico located near the U.S. border that assemble imported inputs into finished goods for export back to the United States. The key idea is taking advantage of cheaper Mexican labor to reduce production costs, while the close-to-border location streamlines shipping and border procedures for goods headed to the U.S. This setup is the classic example of border-based manufacturing aimed at export, which is precisely what maquiladoras describe.

Other terms refer to zones or assembly operations in different contexts, but the specific Mexican border factories designed to exploit lower labor costs for export align with the maquiladora concept.