On the day of the presidential inauguration, Pietra Rivoli admits she’s happy to escape her home of Washington, D.C.
The Georgetown University business professor and author of the bestselling book The Travels of a T-Shirt in the Global Economy, which exposes the workings of globalization by tracking the life of one shirt, is in Vancouver to speak about trade and Donald Trump at the University of British Columbia.
She asks the audience if anyone knows the percentage of votes cast in her own city for the U.S. president. Ten per cent, guesses an audience member. The answer, says Rivoli, is a dismal 4 per cent.
“This is a nightmare to me, on multiple levels, that he is our president,” says Rivoli. “I couldn’t believe it leading up to it, and I can’t believe it now. But I listened to what he was saying today [about international trade agreements], and I can’t disagree with the overall point he was making about the game being rigged.”
Trade vs. trade agreements
Rivoli is neither for nor against trade. “There are two polar sides to this debate, and I am very much in the middle.”
But the U.S. public appears to have strong feelings. “The polling data [shows that] about 70 per cent of people are feeling pretty good about trade, but a majority feel badly about trade agreements,” says Rivoli. She thinks these contrasting statistics result from the lack of transparency that accompanies closed-door deals and hurts democracy.
Turning to 1999 in Seattle, W.A., when mass anti-globalization protests effectively derailed the World Trade Organization talks, Rivoli argues that the organization has not recovered. “The WTO is very lame right now, and that would be their own assessment. There has been no forward motion in close to 20 years.”
Yet the topic of international trade is “just as central then as it is now to so much of our public discourse.” With Brexit and Trump, trade has once more become a controversial topic.
The Travels of a T-Shirt in the Global Economy is about a shirt Rivoli purchased and tracked to learn about international trade and globalization. Its material was grown by small farmers in West Texas, known as “the world’s largest and most important cotton-producing region.” The cotton was shipped to China, where it was spun into yarn, knit into fabric, and then stitched into apparel. The shirt then jetted back to the United States to enter the retail market and — after some wear and tear — was later sold into the used clothing market in Tanzania. Worn clothing is this West African country’s biggest import from the United States. Local Tanzanian business-owners resell the clothing.
Rivoli has been surprised by some very strong reactions to the book in the 12 years since it was first published. People have both very positive and very negative outlooks on the story.
“On the positive side, many people look at this through a traditional business or economic view, as a picture that depicts creation. You’re creating products, you’re creating employment, you’re creating flows of capital and money. Whereas someone with a different lens sees destruction: you’re destroying the environment, you’re destroying jobs ... and there’s a valid association of the evils of the sweatshop.”
By interviewing individuals at every interval in the far-flung supply chain, Rivoli found that workers had a narrative that differed from anti-globalization and anti-trade arguments.
“I think the positive consequences are a little bit broader than economics. I spent time in a village that didn’t have electricity or running water, but they were making handbags,” she said. “So the straightforward consequences of these women getting a paycheck were obviously at the top of significance.”
The follow-on consequences of more complex issues such as spousal freedom also meant “being able to stand up to your husband because of economic empowerment. All these things don’t have a dollar sign attached to them.” Rivoli also noted, “One of the mistakes that our students and anti-sweatshop protestors at Georgetown [University] make is that they think they know what these workers should want, and that’s not a good form of colonialism. The workers should be telling us what they want.”
In the summer of 2016, Rivoli was in East Africa, where she learned of a plan to ban used clothing imports. She correctly predicted this would not solve the problem of small local producers and businesses being put out of work. “Used clothing has just been replaced by new clothing from Bangladesh, because it’s actually just as cheap. So it’s really hard to say ‘we’re going to develop this local industry,’ unless you close all borders to everything.”
Consequences vs. principles
Economists commonly decide if a global market system is positive or negative based on consequences, for example, by drawing an assessment of trade flows by weighing the good consequences against the bad. “This could mean jobs, income, GDP, or living standards, and these can all be easily measured and evaluated.”
But another way that many people decide if a system is good or bad is based on principle. “People really do want to talk about fairness and justice,” says Rivoli.
Using Texan cotton farmers as an example, she points to the unfairness of Big Agriculture in the United States.
“The big, big crops — cotton, wheat, corn, rice, and soy — are supported by very high levels of government subsidies,” she says. “So if these folks are paid by an extra 30 per cent, that’s going to induce them to produce a lot more cotton, because the subsidy is based on your output. What has happened in the world of BigAg is these big subsidies reduce the market price of these crops. Cotton prices in the world are 20 per cent lower than they would be without this subsidy.”
But, she says, these folks needn’t care because they’re still getting paid.
Rather than pointing to capitalism, Rivoli advocates understanding that the political system that created the problem. “It’s not economics, it’s not the market, it’s a political decision to support only these farmers that creates an injustice elsewhere in the global economy. You don’t blame capitalism, you blame politics.”
She says this issue of injustice was central to the 1999 protests that brought down the WTO talks. “People see this, and it invalidates their faith in the system and global supply chains overall.”
In the 1990s, Bill Clinton touted his love for trade, arguing that if China was allowed into the global supply chain, the country would move closer to the United States in other ways. “We’ll have improvements to human rights, improvements in freedom of the press, and [more] political participation — that was the selling point that he used, but it hasn’t worked that way. In my view, many of these things are moving backwards. In my 30 years of going to China, for the first time last year, my email was blocked.”
But still, Rivoli questions why so much anger was directed at China in the recent U.S. presidential election rhetoric.
“If you look at the data on jobs, the number of folks who have been directly replaced, or the number of folks [who] can say their fortunes have been directly harmed by China, is so much smaller than [anything that could] explain this backlash.” She says that China’s growth in hegemonic power might be threatening some Americans’ ideas of their own prestige in the world. But she lectures that this is also far too obscure an idea to measure in economic importance; as an economist, she’d rather discuss how much your paycheck is, how much food is on the table, or whether your kids can go to college.
Trump vs. the TPP
The Trans-Pacific Partnership — opposition to which arguably helped elect Trump — was negotiated in secret in the United States, in contrast to the openness that traditionally applies to public policy in a democracy.
“There wasn’t a role for public welfare. No one was representing the public: the textile industry, the steel industry, financial services, and even the labour unions. People don’t trust that type of process, and it does have anti-democratic elements to it,” says Rivoli.
The story behind much of the opposition to the TPP, popularized by Senator Bernie Sanders and Senator Elizabeth Warren, involves a loss of national independence. Under the TPP, if a country’s environmental or human rights regulation inhibits a corporation’s potential for accruing profits, it could sue the country’s government through an extrajudicial court. Similarly, trade disputes will be settled “outside of the legal system of these member countries.”
Trade is fine and good, says Rivoli, but the problem occurs when there’s mistrust of these types of dealings. “It’s a system thing. People are not trusting the system . That’s what’s really at work here, which again is much, much different than saying, ‘I’m opposed to trade’.”
Rivoli says the election made clear that the divide between people who think in terms of economic consequences and those who think about principles “is a pretty big chasm.”
After listening to Trump’s inauguration speech, she confesses that it’s “very difficult for me to listen to him be right, because he’s wrong about almost everything.”
“Trump spoke this morning as he so often did about the powerful people in Washington who only take care of themselves and how no one is looking after the little guy,” she says. “I would have dismissed that speech if I heard it before I wrote this book, but [it’s] what I’ve been listening to for 15 years from people all over the country and all over the world.”
With concrete examples from along the global supply chain, she says she can pinpoint where the system is tainted. Whether it’s subsidized cotton or trade agreements, “rules are being written that are not made through a real democratic, political process.”
Principles of fairness have been violated and economic consequences have followed.
“Again,” reiterates Rivoli, “my problem is not with trade, it’s with the politics of trade.”