The Government of Pakistan utilized a tax on the export of cotton lint from 1988 to 1995. Prior research has shown that this policy had a significant impact on the cotton and yarn sectors in Pakistan over that period. Pakistan eliminated the export tax in 1995 and has not reinstated it. The elimination of this policy has had and will continue to have implications for Pakistan and the rest of the world as Pakistan adjusts to those changes. Indications are that cotton production and exports could significantly increase, placing downward pressure on world cotton prices. Cotton yarn production and exports are expected to decrease as a result of higher internal prices for cotton.