co, where they were made into fabrics, and the fabrics were re-imported back into the United States. It is expected that textile trade between these two countries will provide many entrepreneurial investment possibilities in the future, and the available information supports this expectation.
Statistics reflect that Mexico has been one of the chief textile exporters to the United States since the institution of NAFTA, the North American Free Trade Agreement. By 1996, Mexico was exporting significantly more textiles to the United States than was China. In fact, exports of textiles and fibers from the United States to Mexico have increased by about 25% per year since 1986. In economic terms, Mexico exported about $2.900 million (U.S. $) to the United States from January 2004 to May 2004, which represented a 25% increase in exports over that time period (Infomat, 2005).
Prior estimates by textile experts had predicted that 25% of Mexico's textile companies (about 3,000) would go out of business upon the enactment of NAFTA
(Infomat, 2005). Instead, NAFTA greatly benefited Mexico's textile industry. NAFTA also effected a tremendous growth in foreign investment in the Mexican textile industry. Overall confidence in the Mexican economy has been a key factor in the growth of the industry; the economy itself has continued to grow at a rate of between three and five percent a year. The market and growth for Mexican textile imports has far exceeded those percentages (Infomat, 2005). Now that trade quotas have been eliminated, it will be very difficult for Mexico to compete with China. The best prospect for the industry is to convert over to a garment oriented industry and export polyester blends and cotton-related products of high quality and high style (Infomat, 2005).
Import and export quotas have existed for over forty years. Prior to implementation of NAFTA, Mexican import duty rates varied by product but were typically 15%. M...