While the number of export processing zones has risen to about 850 in 2000, their success in
expanding employment and trade is mixed. The aim of this paper is to make a review of the
role and the impact of EPZ in world trade and its likely impact on host countries' economies,
especially in terms of foreign exchange earnings potential, FDI, technology transfer, and
employment effects on the local and national economies. To this end we will be looking at
Mexico where export processing zones are very developed. Mexico seems an appropriate case
study to assess to which extent the predictions of economic theory are realised both because
of the abundance and quality of available data and because of its proximity to the US, which
makes it a very good example of the international division of labour. We will analyse how the
parameters mentioned above (employment, foreign exchange earnings potential, FDI and
technology) have evolved over the last 10-15 years and how much of the change can be traced
back to the maquila industry. The main source of data is INEGI, the Instituto Nacional de
Estadistica Geografica e Informatica of the Mexican Government