The increased move toward regional trading blocs has had many effects since the implementation of what is now known as the European Union. The emergence of export processing zones (EPZs, Maquiladoras) could be called less of an emergence than a result of these changes, not without its own reservations in terms of social costs. The rise of neoliberal policies and more specifically, the importance of free trade has been the substantial force behind the increased demand of EPZs around the globe. Yet as much as one would assume that the links between the policy makers in regional agreements and the governments who establish EPZs would have a positive correlation, that is not always the case. In fact there has been a slide away from the incentives that have made EPZ?s so attractive in developing countries.
There has been a rise in the number of regional agreements over the past five years, however the one which has had the most impact of EPZs is the North American Free Trade Agreement. A sharp decline in the number of maquiladoras in Mexico since the country signed the NAFTA in 1994 has not been a circumstance of change. Rather the policies that NAFTA has implemented have been restrictive and the appreciation of the Mexican dollar against the US has led to a loss in competitiveness of the EPZs, a factor extremely important since it is that competitiveness that attracts foreign investment. Neoliberal policies and the push toward free trade are actors in the globalization process and it is in this environment that allowed NAFTA to be instituted. The question that arises from this is what sort of impact does this have on that type of factory system? There is evidence that neoliberal policies and NAFTA act contradictory to one another in the case of the maquiladora industry in Mexico, but that the end result is a negative one that will later move to reinforce the factors that instituted maquiladoras in the first place.
When expressing the concerns associated with globalization, it is extremely tempting to attribute overreaching values to all places, but to examine global constructs means to understand the difference between an absolutely accepted system and the influence of a dominate one. What must be established is the exact context in which something is being discussed and in terms of globalization, influence is the key. Neoliberalism, when broken down and compared to general assumptions, shows that there is little new about it. Rather, it is a new spin on old ideas, the market imperative and comparative advantage, trade liberalization and free markets. The reasons for the sweeping view of neoliberalism stems from its association with the term globalization. The association is not unfair. Considering the moves that neoliberalism has made toward fostering economic hegemony, there is reason to be weary. Some believe that neoliberalism advocates market based solutions to social problems a harsh sentiment, but none the less true. The idea of regulating everything through the market is what makes neoliberalism a neo-ism. While liberal ideas are older than Ted Koppel, it is the erosion of the welfare state that has opened many people up to the reality of market driven forces.