NCPA - National Center for Policy Analysis

Mexico Comes Into Fashions

February 10, 1997

The U.S. apparel industry is moving operations from Asia to Mexico as a result of NAFTA (the North American Free Trade Agreement), say observers, to the economic advantage of both countries.

  • Half of all apparel sold in the United States is manufactured outside the country.
  • Whereas 83 percent of imports came from Asia in 1980, only 41 percent enters from there now.
  • Since NAFTA's enactment three years ago, Mexico's apparel exports to the U.S. have tripled -- to $3.3 billion a year.
  • Similarly, U.S. apparel exports to Mexico -- mostly in the form of cut pieces ready for sewing -- have nearly doubled to about $2.5 billion a year.

Trade specialists say this has been a boon to U. S. fabric and yarn makers. In the past, they had supplied only minuscule amounts of fabric to Asia. But they now supply nearly 70 percent of raw material going to Mexican sewing shops.

Partially as a result of these shifting trade patterns, clothing costs to American consumers have declined, in absolute terms, over the last three years.

Source: Christopher Palmeri and Jose Aguayo, "Good-bye Guandong, Hello Jalisco," Forbes, February 10, 1997.


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