Accounting for about 25% of U.S. total cotton exports, Mexico’s importance for the U.S. cotton industry has reached a significantstage. 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 assessmentof potential implications of the Agreement on Textile and Clothing’s quota elimination on Mexico’s cotton consumptionand U.S. cotton exports to Mexico. It is based on the growing interdependence between the U.S. and Mexico’s cottonand textile industries and some plausible scenarios for the impact of the 2005 textile and clothing quota final eliminationon U.S. markets.
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