The United States, Canada, and Mexico are involved in discussions on a North American Free Trade Agreement (NAFTA). Because Mexico's cotton production is only a fraction of that of the U.S., and because both countries market production above consumption in a very large international market, there is little reason to believe that a NAFTA will have a large direct effect on U.S. raw cotton production, use, or price. However, since the U.S. imports large amounts of textiles and apparel, the agreement on rules of origin for fibers, yarn, and fabric could have major consequences for the U.S. textile and apparel manufacturing industries, and indirectly some effect on the cotton production sector. Rules of origin would be especially important if they are not resolved in the General Agreement on Tariffs and Trade (GATT) prior to a NAFTA.