Post COVID-19 trade policies are being built against a backdrop of protectionism and consumer nationalism in an economy gutted by the pandemic. The call for buying domestic products has been exacerbated by instances in which goods were required to battle the pandemic, such as masks and other personal protective equipment, were unavailable because of a heavy reliance on foreign manufacturers that prioritized domestic use.
This has reverberated across all sectors, evident in the policies being mobilized in countries such as the United States, where manufacturers have lauded the tariffs placed on foreign competitors, and the Brexit era Great Britain. The French finance minister has advised grocery stores to ‘stock French Products’. Protectionism has even gone so far as to blemish the relationships between long time allies like Canada and the United States, where the Trump administration placed tariffs on Canadian steel being produced in Ontario. The Ontario Premiere fired back, calling on Canada to buy Canadian:
“...I just have to say how disappointed I am... we’re their number one trading partner in the world, we buy more goods off the United States than China, Japan and the U.K. combined. Who does this? In times like this, who tries to go after your closest ally, your closest trading partner & number one customer in the world… I encourage the deputy prime minister to put as many retaliatory tariffs on as many goods as possible… folks, as individuals, we can’t put tariffs on, but we can hit them where it hurts… we need to start getting our manufacturing folks and packaging folks to place the ‘Ontario made’ logo (on goods). Rather than tariffs that might be a few billion, we can have an impact on our employees, our friends, our neighbours, our families. We (Ontario) do $390 billion a year, even if we do one in ten purchases that say ‘Made in Canada’ on it, that’s tens of thousands of jobs, that’s how we can retaliate. By making sure that every product you guys, and every manufacturer, and the big five grocery retailers…. We need you to start buying more made in Ontario, made in Canada goods…. To protect our economy. We’re an economic powerhouse… we can compete against anyone… get out there and buy Ontario made products… it’s us versus them.”
The point made by the premiere is that, unlike tariffs and other trade barriers, consumer nationalism can be undertaken by individuals and often doesn’t have to be paired manufactures putting domestic goods at the forefront, or government intervention. Calls for consumer nationalism are often tied to bigotry and xenophobia, but also espouse positives like patriotism and civic mindedness.
It stands to reason that free trade has largely benefited people in general, with the United Nations reporting free trade economic interdependence has resulted in global GDP going from $50 trillion in 2000 to $75 trillion in 2016, and saw migrant workers send upwards of $450 billion back to relatives in their home countries. Proponents of free trade point to this, and draw the conclusion that globalization has lifted billions of people out of poverty, and generally improved the lives of those involved in the international supply chain.
That same timeframe which saw an increase in GDP also shed light on some interesting facts about the global supply relative to apparel production:
China dominates the apparel export business, skyrocketing exports between 1995 and 2015 from $33 billion to $175 billion, though this number has shifted significantly lower lately as wages in China rise.
China’s latest five year plan outlines a commitment catering to domestic consumers and emphasis on expanding their global influence in tech. In contrast, the United States and others are working to curtail the ambitions of Communist China in markets across the globe, not only in tech but in manufacturing. Consumer nationalism will see an impact on the apparel industry as well, as traditional consumers of China made goods focus inwards, and China focuses on their own domestic consumers.
An apparel worker in Bangladesh may make as little as $68 a month compared to a wage in China of $230 a month, compared to $1600 a month in the United States.
Opponents of consumer nationalism argue that globalism has helped pull people out of poverty. Looking at the income disparity between the nations above is just a quick snapshot of what a real wage looks like in other parts of the world. The apparel industry is reputed for labour and human rights abuses, and the cheap clothing provided by global supply chains often comes at the cost of exploitation.
The apparel industry has doubled production since 2000, and as of 2014 consumers were purchasing 60% more clothing and disposing garments twice as fast.
As the global supply chain made available a huge selection of cheap goods, consumers bought more clothes and disposed of them more frequently.
Current best estimates place the number of manufactured items at some 150 - 300 billion garments are produced each year, 30% of which goes unsold, meaning 45 - 90 billion garments are either destroyed or sent to landfill or otherwise left unsold.
Landfills are swelling with clothes that are either worn out or thrown out prematurely.
While the jury is out on whether protectionism and consumer nationalism has merit, it is evident that this ‘turning inward’ and purchasing domestically made apparel could become more common. With China focusing more on high tech business, global income disparity, fast fashion giving way to slow, ethical fashion may happen at an accelerated rate. This is particularly true if it means manufacturers are committed to practices that protect both their people and the environment.