ABSTRACT
This paper discusses the likely impacts on Texas cotton producers of: (1) agricultural trade liberalization proposed at the recent General Agreement on Trade and Tariffs (GATT) round and (2) the U.S.-Mexican Free Trade Agreement (FTA). The impact of GATT trade liberalization is examined by simulation of a cotton-specific econometric model of Texas in conjunction with postliberalization prices predicted by the USDA Economic Research Service. The result of this simulation, when compared to the baseline scenario, shows some decline of the value of cotton production in Texas in the short run. The impact of the Mexican Free Trade Agreement on Texas cotton is highly uncertain. We discuss likely positive and negative impacts.
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