For the last three decades free trade has been ardently promoted, by the US in particular, as the foundation of a peaceful and prosperous global economy. But in his inauguration speech on Monday, US President Trump made it clear that he will continue to challenge this long-established economic consensus, with a promise to immediately overhaul the trade system to protect American workers and families.
While the self-proclaimed ‘Tariff-man’ may be offering false solutions, when we look at the world in 2025, there is reason to question the benefits of the current global trade system. In a world increasingly threatened by planetary collapse, inequality levels at historic extremes, and 92 countries engaged in conflict beyond their borders, one can rightly ask whether free trade is living up to its promise of delivering peace and prosperity.
Looking at the recent history of trade in textiles and clothing offers some interesting insights.
Prior to 2005, global textile trade was governed by a strict quota system under the Multi Fibre Agreement (MFA), which limited the amount of clothing developing countries could export to European and North American markets. Various quota systems had been in place since the 1950s imposed by industrialised textile producers like UK and US who wanted to fend off the threat of cheap imports from newly industrialisng countries. The quota system under the MFA guaranteed different countries, from Bangladesh to Guatemala a fixed production quota, whilst significantly limiting market access for other nations such as India and China.
This all changed with the Uruguay round of General Agreements on Tariffs and Trade (GATT), which led to the creation of the WTO and catalysed the transition to the liberalised global trade system we know today. The quota system for textiles was eventually dismantled in 2005 on the grounds that it would unleash the restraints on low-income countries allowing them to grow their export market, develop their economies and eradicate poverty. Within the first nine months of the quota system ending, the value of Chinese clothing exports to the US jumped 56% and 44% to the EU in the first eight months. Today China remains the largest textile producer in the world both in terms of overall product volumes and exports.
Owing in part to the relocation of production to countries with low wages, the volumes of textiles produced doubled between 2005 and 2015 bringing significant environmental impacts. The textile industry is estimated to contribute around 10% of global GHG emissions, while the dyeing and finishing of textile products is estimated to be responsible for 20% of all clean water pollution. Moreover, the industry is becoming increasingly dependent on the extraction of non-renewable fossil fuels due to the dominance of synthetic fibre production. At the same time, 98% of global garment workers, those who were supposed to benefit from the liberalised trade regime, do not earn a living wage and are unable to meet basic needs.
Downstream, consumers have of course benefited from lower prices. Between 1996 and 2012 average clothing prices in the EU have dropped more than 30% relative to inflation, allowing European consumers to increase their consumption. Today, however, textile overconsumption in the global North has resulted in an ever-growing mountain of textile waste, presenting significant challenges for waste management systems, and leading to environmental hazards in the global South where waste textiles are exported. The devastating fire at the start of 2025 in Ghana’s Kantamanto Market, which recieves 50 million garments per week from the global North, being the most recent tragic outcome of this unsustainable system.
It is legitimate therefore to step back and question who is really benefiting from the liberalised free trade in textiles and whether there are opportunities to reform the system to ensure this benefit is more equally distributed- both for people and planet.
As the case of textiles shows, today’s wealthy industrialised countries have historically benefited from trade barriers, allowing them to protect their economies against cheaper imports. Low-income countries should equally enjoy the same opportunities to use public policy to support their domestic industries. Ultimately, localising economies will be a key aspect of the sustainability transition, reducing the environmental impacts of long transportation routes, improving the proximity and circulation of resources and increasing resilience to supply chain shocks.
Countries should have the agency to prioritise trading partners on the basis of shared social and environmental values. In terms of textiles, this could include preferable trade agreements based on commitments to fair and livable wages for garment workers, safe working conditions and environmental protections. Countries should be empowered to use public policy tools to promote these ends, rather than penalised and restricted in the name of free trade. For example, in the Dutch Circular Textiles strategy, policy makers are investigating the potential of import quotas to address the environmental problems caused by the overconsumption of low-quality textiles.
Meanwhile proposals have been developed for the establishment of a United Nations Ethical Trading Zone, which would serve as an alternative to the WTO and could assist in aligning trade with the goals of sustainable development.
Despite Trump’s rhetoric and tariff threats, it is nonetheless high time for an honest conversation on the benefits of free trade and a paradigm shift towards a system that is fit for purpose in dealing with the challenges of the 21st century.
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This blog is an output from Sufficiency Approaches to Fashion and the Environment (SAFE), a 2-year project led by Hot or Cool which brings together policy makers, researchers and businesses to advance systemic change in the fashion industry towards a fair consumption space.
