Today, more than ever, U.S. and other third country multinational corporations are global in their market reach as well as where they do business. This increasingly requires that companies extend their definition of the communities they serve beyond traditional national/regional/local interests to include communities beyond America’s immediate borders where they operate or have a presence. Nowhere is this truer than along Mexico’s northern border where there are over 2,750 maquiladora assembly and manufacturing operations with over 60% owned by U.S. companies. The list of Mexico’s top 100 employers in this category includes major Fortune 500 and non-U.S. foreign companies firms such as Delphi, RCA, Ford Motor Company, Tyco, General Electric, General Instruments, Johnson & Johnson, Sony, Hitachi, Medtronic, Samsung and ITT.

Clearly U.S. companies and third country subsidiaries in Mexico (originating from Japan, Korea and the EC) have benefited under the North American Free Trade Agreement (NAFTA) through expanded trade and commerce, yet the same cannot be said for the border communities where many of these same companies operate. With expanding direct foreign investment and exports, a marked increase in human migration has resulted in unmet social needs, and an overall decline in the environmental quality and health of those living along the U.S.-Mexico border over the past eleven years since the agreement’s enactment. These challenges are not necessarily directly attributed to companies operating in the border region but are realities all the same.

Due to these circumstances, U.S. border counties remain among the poorest in the nation with childhood poverty on the rise, increasing school dropout rates, and some of the highest incidences of infectious diseases such as tuberculosis, HIV/AIDS, and hepatitis in the country. Correspondingly, on the Mexican side, similar challenges exist. Urban poverty is on the rise from Tijuana to Matamoros, despite the fact that per capita income figures in these cities are above others in the interior of Mexico. The NAFTA-induced relocation of production from the United States to Mexico has accelerated the level of migration to the border region and with it the incidence of rural to urban poverty across Mexico.

Without a doubt, companies operating in the U.S.-Mexico border region, with a combined population now exceeding 12 million people1, stand to gain from a healthier workforce and more vibrant, livable border communities. After all, two of the biggest challenges for companies along the border are employee retention and customer acquisition. In fact, this holds true not only for the border region but for multinationals operating around the world in general. Evidence of this is supported by a survey conducted by Cone/Roper in 1993/1994 providing strong evidence that consumers are increasingly more inclined to buy products that are associated with a company that has a positive social image, and with a cause they cared about. Over 60% of consumers stated that they would switch brands and/or retail stores to support a cause they cared about.2 In this context, it is clearly advantageous for a company to be viewed favorably for its charitable efforts. So, why don’t more U.S. companies and multinational corporations operating along Mexico’s northern border give?

1. Southwest Center for Environmental Policy & Research, 2003, http://www.scerp.org/population.htm
2. Kotler, Philip and Nancy Lee. “Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause”, New Jersey, 2005, Pg. 7.