ABSTRACT

Accounting for about 25% of U.S. total cotton exports, Mexico’s importance for the U.S. cotton industry has reached a significant stage. At the same time, the US market is critical for the Mexican textile/clothing sector absorbing 95% of its exportsThis paper presents the results of an updated and comprehensive econometric and simulation model that allows for the assessment of potential implications of the Agreement on Textile and Clothing’s quota elimination on Mexico’s cotton consumption and U.S. cotton exports to Mexico. It is based on the growing interdependence between the U.S. and Mexico’s cotton and textile industries and some plausible scenarios for the impact of the 2005 textile and clothing quota final elimination on U.S. markets.