International Trade, Fairness, and the Travels of a T-Shirt: Author Speaks at Wake

“There is this growing wariness about international trade,”  Author Pietra Rivoli explained to an assembled group Thursday at the Kulynych Auditorium.  Rivoli sees the current Occupy protests as an expression of this wariness, which can be traced back to the anti-globalization protests that started in Seattle in 1999.

The root of the protest Rivoli believes is the concept of market fairness, and that has spilled over into the argument into international trade.

“I think that what we are seeing with people’s anti-trade sentiments is really a judgment about policies and behaviors that they see in our trading partners, and a dissatisfaction with the perceived fairness [that] is really showing up as opposition to trade,” she said.

Rivoli spent five years looking at what was behind international trade by following the story of a simple t-shirt she bought in a Florida while vacationing with her family.  The t-shirt came from cotton picked in Lubbock Texas, was put together in a Chinese factory, made its way back to the United States and then ended up in Tanzania, Africa. Thirty years ago, Rivoli noted, that shirt would have likely been produced in the Carolinas.

Rivoli traveled around the world following the path of goods bought in the United States  for her book, The Travels of a T-shirt in a Global Economy.  Financial Times named it one of the best business books of the year in 2005.  When Rivoli finished the book, she was surprised at the reactions people had with the components of international trade.

Despite the notion that economists support the idea that free trade leads to a more prosperous country, Rivoli said it’s the processes associated with international trade that creates a suspicion about the free market.

“You see a lot of energy and environmental consequences to this very far flung supply chain,” she said.  “All these companies look around the world and say ‘Where do we have the easiest rules in terms of environmental production, let’s go there.’ Companies are shipping their production to places with the lowest environmental standards. “

But trade can be good for the environment too. Rivoli recalled a recent trip to China where she saw one of the most astonishing and technologically advanced recycling plants she’d ever seen.  The machines in the plant were made in Norway. Even in a country with so many pollution issues, Rivoli noted those machines couldn’t have made it to China without international trade.

So is trade bad for the environment?

“Right now, some of the most exciting technological advances that are related to clean technology and environmental sustainability–trade allows these advances to spread,  so it’s a complicated question,” said Rivoli

Rivoli believes that the notion of fairness that has driven much of the recent Occupy movement, is also wrapped into the international trade debate.

“Trade is part of our market system and it’s that market system right now that people feel is somehow not fair, ” she said “Citizens need to believe that trade is fair, they need to believe the game is fair.”

That’s what underlies the key in fixing the problems with economic policy–the perception of the free market.   Historically, policies have focused on taking care of workers who have been forced out of jobs that moved overseas. This type of strategy works and is needed, says Rivoli.

“There’s no doubt that these are the kind of policies that will help address some of the concerns on main street,” but, she says, United States economic policy needs to do more.

“These policy responses do not by themselves address concerns about fairness. They don’t address concerns about process and they do not address concerns about the environment,” said Rivoli.

“If we are going to turn the tide on all this anti-market, anti-globalization sentiment we need a set of new policy responses that address new issues that I think people have concerns about today.”

Pietra Rivoli is a professor in the Robert Emmett McDonough School of Business at Georgetown University. You can learn more about her Travels of a T-Shirt, on her web page.