Globalization and Your T-Shirt

I LOVED this book , I was pleasantly surprised at how good a read it was. One of my favorite business writers, Roger Lowenstein, wrote a glowing review in the NYTimes (" THE really good writers do not write 'about' their subjects so much as use them to tell a story"). While I knew a little about US agricultural subsidies, and the garment industry, the author supplies details in such an entertaining style, that I found it hard to put down the book. The description of the t-shirt factory in Shanghai reminded me of a visit I made to a similar factory in Southeast Asia.

If you are interested in Fair Trade this book is a must read. Using the garment industry as a prism upon which to view globalization, the author takes you from the cotton fields of Texas, to the garment factories in China, back to the t-shirt printing factories in the US, to the used t-shirt processors in New York, and finally to the Tanzania's army of entrepreneurs who supply their country with used clothing from the US.

Ever wonder what happens to all those t-shirts that even Goodwill can't sell? It turns out that there is a whole industry that takes those garments, exports them to Africa, where savvy business people are able to identify which items will sell at what price. There are many amazing tidbits in the book, but this one really stands out: the market forces in Tanzania's Mitumba industry, and how that micro-market sets the price of a used t-shirt from the US.
I'm a firm believe that Free Trade does work, and that Comparative Advantage is something that will prevail in the garment industry. I was shocked by how bizarre (and ever changing) the rules that govern clothing imports are.

Brassieres are allowed free access only if the firm producing them has used components in which 75% of the value of the fabric has been sourced in the US. A debate over which part of the brassiere "count" toward the 75% went on for some time and was finally negotiated to include cups, sides, wings, and backs, but to exclude straps, bows and labels.

So Cups are ok, Straps are not. The hilarious thing is that these rules change constantly. The idea is to make the rules convoluted and to change them often, with the hope that the manufacturers give up and produce the garments in the US. Eventually all these trade barriers will disappear: the Comparative Advantage of the overseas garment industries cannot be denied much longer. It is reminiscent of the situation in the UK over a hundred years ago: rather than allowing cotton underwear from South Asia into England, the population was essentially forced to wear, domestically made, wool underwear for years. Ouch, I mean Itchy! Besides, as I pointed out earlier, developing nations need aid, AND access to the US market.

Free Trade is a good thing, but it does have problems. Our purchase power can nurture Fair Trade companies and redefine the nature of Free Trade. It is important that the anti-sweatshop, and even the anti-globalization, movements soldier on. Their work has led to both important improvements in factory conditions all over the world, and to more consideration of environmental and labor concerns in trade negotiations. As consumers, we can use our purchase power to help improve the lot of workers worldwide. Nothing is more powerful than a brand with market share, but is synonymous with fair labor conditions and sustainability.

Please read this book, you will enjoy it, and you will have a different perspective on trade issues . I guarantee.