t Mexican producers. This obviously benefits US consumers, who now have more money to spend on other items. The cost of a typical pair of designer jeans, for example, fell from $55 in 1994 to $48 in 1997. Nor is the fall in prices simply a result of the movement of production from the United States to Mexico.NAFTA has also resulted in textile production being moved from Asia to Mexico. In 1980, 83 percent of all US textile imports came from Asia. By 1997, Asia accounted for 41 percent of US textile imports as companies switched their source of textiles from Asia to Mexico. An example of this trend is the US clothing retailer The Limited Inc., which in 1997 switched its source for textile products from Sri Lanka to Mexico. According to a spokesman for The Limited, although wages in Mexico are three time the $60 per month that apparel workers make in Sri Lanka, it's cheaper and faster to move goods from Mexico to the United States than from Sri Lanka. Under NAFTA there are no tariffs on imports from Mexico, but there is a 19 percent tariff levied on textile imports from Sri Lanka. When all these factors are considered, it becomes cheaper to produce textiles in Mexico than Sri Lanka. Thus, as a result of NAFTA, production has been shifted to a lower external cost source. The Limited plans to pass on its cost savings to US consumers in the form o lower prices.In addition to lower prices, the shift in textile production to Mexico has also benefited the US economy in other ways. First, it has helped produce a surge in exports from the US fabric and yarn makers, many of whom are in the chemical industry. Before the passage of NAFTA, US yarn producers, such as Burlington Industries and E.I. du Pont, supplied only small amounts of fabric and yarn to Asian producers. However, as apparel production has moved from Asia to Mexico, exports of fabric and yarn to that country have surged. US producers supply 70 percent of the raw materi...
