TIJUANA, Mexico — At closing time in Tijuana’s “Industrial City” east of downtown, the streets fill with young workers, mostly teen-age women, departing from jobs in foreign-owned assembly

plants known as _ maquiladoras._ The spotless paved streets and the rows of factories--housing high-tech manufacturing giants such as Sanyo, Matsushita and Casio--belong to a well-oiled

industrial metropolis that employs 70,000 people in more than 500 plants in this border city. But, in the distance, the ramshackle homes of factory workers cover the hillsides and serve as a

reminder that low wages are the lifeblood of this bustling border economy. “I hardly earn enough to help my family with the rent, after paying for food and the bus,” said Maria, 16, who had

to computers and jeans to toys--for export back to the United States. There is growing sentiment here that a free-trade pact could transform Mexico into “one big _ maquiladora._ “ Many

politicians, government officials and business leaders in Mexico view the U.S.-dominated _ maquiladora _ industry on the border as a kind of free-trade prototype for a vast economic

expansion, fueled by domestic labor and U.S., Japanese and other foreign capital. “The _ maquiladora _ industry will have to transform itself into a more of a complete business unit, with

marketing and sales branches,” said Oscar Martinez, a Mexican citizen and a Sony executive here, who is president of the city’s _ maquiladora _ association. “It will happen slowly, but I

think there will be a lot of opportunity.” In the San Diego-Tijuana area and other border “twin cities,” the surge of transnational development clusters--dubbed “mini-Hong Kongs”--has become

a source of civic pride and, for some, economic prosperity. “If we didn’t have _ maquiladoras _ here, it would still be the same old Tijuana, based on cheap tourism and the service

industry,” said Martinez, who has risen through the industry ranks. “Now we have a lot more going for us.” Although U.S. labor unions, environmentalists and others have raised a red flag

about unbridled _ maquiladora-_ style expansion, opposition from environmentalists and the political left within Mexico has failed to pick up steam. However, some economic experts and

political analysts south of the border remain skeptical about the long-term value of transforming Mexico into what, they believe, would be a giant low-wage production site. In their view, _

maquiladoras _ do not offer a feasible economic model for this nation of 88 million people. “I think more _ maquiladoras _ is the worst possible thing that could happen,” said Adolfo Aguilar

Zinser, a researcher at the National University of Mexico, who has studied the issue and published his views in the U.S. and Mexican press. Added Jorge G. Castaneda, a professor of

international studies at the National Autonomous University of Mexico: “I think the _ maquiladoras _ are a lousy model for development.” Among the critics’ principal concerns are: --Low

wages. _ Maquiladora _ executives say they pay most workers about $1.30 an hour, less than one-third of the legal California minimum wage but almost three times the legal minimum in Mexico.

However, assembly-line employees say their net pay is closer to 80 cents an hour--hardly enough, they contend, to feed families in the expensive border region. Some experts note that this

may explain why border plant work forces consist mostly of women, and why men with families tend to seek jobs in the United States. --The environment. Critics say the _ maquiladoras _ have a

dismal history of environmental protection and worker safety. They say evidence of toxic chemical discharges from the plants has surfaced from San Diego on the Pacific to Matamoros near the

Gulf of Mexico, threatening drinking water supplies. Several studies have documented health threats to workers, particularly pregnant women, exposed to the glues, solvents, caustics, heavy

metals and other substances widely used in the plants. The U.S. Environmental Protection Agency this week created a position in its office for international activities to monitor pollution

from the border plants. Mexican regulatory agencies concede that they are woefully understaffed, despite stringent, U.S.-style laws on the books in Mexico City. --Technological benefits. The

expertise and technology used in the Mexican plants remain in foreign hands, critics say, with little prospect that they would become available to domestic companies. --Larger benefits to

the domestic economy. Critics say that the minimal use of Mexican-produced products and raw materials--less than 2% of all content consumed in the plants--does not offer economic benefits

beyond the border region. They question how much punch the _ maquiladoras _ ultimately can provide for a poor economy like Mexico’s, which needs to turn out skilled workers and more

technologically advanced products. Worry has also been expressed that multinational corporations will simply move to sites in Asia should labor costs rise substantially in Mexico. “There’s a

delusion (in Mexico) that the United States is going to pay for Mexico’s economic development,” National University researcher Aguilar said. “But, in fact, the United States will maintain

the higher-paid jobs and technology, and Mexico will specialize only in cheap labor.” Concerns about the _ maquiladoras _ mirror broader worries in Mexico about free trade. Some argue that

an agreement with the United States would damage established Mexican industry--from agriculture to manufacturing--by flooding the Mexican market with U.S. goods. Even the Mexican small

farmer, once the very symbol of nationalism, could see his livelihood suffer at the hands of U.S. agribusiness, some critics say. Leaders of Mexican industries and government officials

insist that _ maquiladoras _ have had a positive impact on the Mexican economy, generating more than $3.5 billion in hard currency annually--second only to the nationalized petroleum

industry, which is off limits to foreign ownership. Under government guidelines, raw materials and equipment for the _ maquiladoras _ are transported into Mexico duty free. Finished products

are later shipped to the United States, with fees paid only on the “value added” in Mexico. Experts say that the open border for goods and capital envisioned in a free-trade pact would

eliminate the preferential regulations that aid _ maquiladoras. _ But, far from damaging the industry, a trade agreement is expected to create a bonanza for expanding _ maquiladoras _ into

Mexican markets that are now largely off limits to foreigners. So far, the _ maquiladoras _ have been growing at a rapid pace, creating new jobs at a rate of nearly 20% a year over most of

the last decade, according to government figures. Thanks to the _ maquiladoras, _ Tijuana has become one of the world’s largest television-manufacturing hubs, providing one-quarter of all

sets purchased annually in the United States, according to one estimate. The Mexican government initially agreed to create _ maquiladoras _ in 1965 with the intent of industrializing the

border and providing work for laborers expected to be displaced by the termination of the _ bracero _ program, under which hundreds of thousands of agricultural workers migrated north as

guest workers on U.S. farms and ranches. During the 1970s, Mexican officials privately expressed their distaste for the _ maquiladora _ industry, which was derided in nationalist circles as

a brazen exploitation of the nation’s workers. The assembly plants were tolerated as a kind of stopgap measure, but that view changed drastically after the collapse of the once-stable Mexico

peso in 1982. A heralded modernization started by former President Miguel de la Madrid in the early 1980s and accelerated by President Carlos Salinas de Gortari transformed Mexico from an

insular economy--ever-suspicious of foreign intentions and all but impenetrable to overseas investors--into a willing solicitor of U.S. and other foreign capital. TRADE TALKS OK’D: Senate

approves “fast-track” Mexican trade talks. D1 MORE TO READ