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McALLEN, TX-It’s a foregone conclusion that the easing of trade between Mexico and the US will spawn development on both sides of the border. But the long-time friendship of both countries’ presidents simply is an extension of what has been occurring for the past two years along the Texas border.

McAllen, TX is a hotbed of industrial activity, with maquiladoras (assembly factories that are wholly or partly owned by foreign countries along the Mexico-US border) responsible for generating upward of 2.6 million sf in the last two years. The metro area also has another 1.5 million sf on the drawing boards for maquiladoras while another 75,000 sf is coming in a new air cargo facility. In comparison, just three years ago the metro region had roughly 11 million sf of industrial space. The metro region consists of McAllen, Edinburg, Pharr, San Juan, Alamo, Donna, Weslaco, Mercedes and Mission, with an aggregate population of about 500,000.

Susan Valverde, director of US business development for the McAllen Economic Development Corp., tells GlobeSt.com that a significant percentage of the growth, if not all, can be attributed in some way to the maquiladora boom. The maquiladoras began in 1988 as a means for foreign companies to use cost-effective Mexican labor to perform low- and high-tech assembly work. These companies often handle the supplies and distribution logistics for the maquiladoras through industrial space on the US side of the border.

Jeff Moseley, executive director for the Texas Department of Economic Development, says there are 3,713 maquiladora operations along the full length of the US-Mexico border, employing 1.3 million people. Moseley is citing numbers as of December 2000 from the Mexican Census Bureau. He says the maquiladoras have gone from low-tech assembly to using highly skilled workers to produce high-tech equipment and other intricate assembled goods, including vehicle parts. “This is a cradle of production for high-tech industries,” says Moseley, who puts the maquiladoras on par with the Singapore and Hong Kong assembly marketplaces.

Mike Allen, McAllen EDC president and CEO, says the McAllen metropolitan area is destined to go beyond servicing the maquiladoras’ commercial development. He believes McAllen’s bilingual, bicultural population will push call centers to be the region’s next major development step. The Rio Grande Valley’s McAllen-Mission area, in fact, already is ranked as the nation’s fourth-largest back office hub. McAllen, a foreign trade zone, currently has 3,315 call center jobs, according to a recent study by Deloitte & Touche of New York City.

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