Argentine President Javier Milei’s scorched earth policies aimed at eradicating Argentina’s fiscal deficit and bringing inflation under control have plunged the country into recession. The number of people in poverty has reached record levels and internal demand for goods and services has fallen by between 30 and 35 per cent, the most severe reduction since the economic crisis of 2001/02. Small businesses have been hit hard with some analysts estimating a 50 per cent decline in their activity since Milei took office in December last year.
Pablo López, Minister for the Economy in the Province of Buenos Aires, has published a report showing the effect of the recession in the province for the last six months. His findings show that 155,000 workers have lost their jobs and that income declined by 10 per cent in what is Argentina’s richest province. The textile sector has been particularly affected. In common with other industries it has had to absorb increases of 800 per cent in water and energy with annual inflation still running at over 250 per cent. Not only has it had to cope with a collapse in the internal market, it has also had to deal with the removal of controls on imports from Bangladesh that are much cheaper than domestically produced garments.
The Textile Co-operative of Pigüé
One of the firms affected is the Textile Co-operative of Pigüé, a town on the southern edge of the province, some 363 miles south-west of Buenos Aires city. The Co-operative works out of the old Gatic factory that was abandoned by its owners and taken over by its workers on 20 February 2004, one of over 400 enterprises occupied and ‘recuperated’ after their owners left the country during a sovereign debt crisis. The early years of the Co-op proved difficult, especially when the previous owners attempted to liquidate their asset and the occupiers were brutally ejected by the police. However the workers persisted with their efforts and were eventually confirmed as the legal owners of the factory.
For a while, the Pigüé Co-op enjoyed a unique trading relationship with GMB London Region and the Battersea and Wandsworth Trade Union Council (BWTUC). BWTUC’s funding arm was and is the Workers Beer Company which, as the name suggests, runs bars at music festivals and this in turn led to the formation of the Ethical Threads clothing company in 2007, supported by the musician, Billy Bragg.
Ethical clothing
Jointly owned by the two union organisations, the motto and aim of Ethical Threads was ‘Driving the sweatshops out of the music business’, the intention being to pressure and persuade bands to cease sourcing their merchandise from sweatshops and use Ethical Threads products instead. For this to occur, Ethical Threads had to find trusted suppliers who would be beyond reproach and this led them to the unlikely destination of Argentina.
By the time Ethical Threads was formed the Pigüé Co-operative was receiving logistical and financial support from Altromercato, an Italian Fairtrade NGO who were running a project that they called the Equitable and Solidarity Textile Chain and it was from this initiative that t-shirts made from certified organic cotton were purchased. The cotton came from small mixed farms in Chaco province, towards the Paraguayan border and 491 miles north of the Argentinian capital. From there, it was ginned, or cleaned, at a local co-operative and then transported in lorries driven by unionised drivers all the way to Pigüé where the shirts were manufactured and subsequently shipped to Europe.
Ethics compromised
Because of the distances involved in getting the product to the UK, the costs became unsustainable, not least because Ethical Threads failed to deliver on its mission to stop bands purchasing t-shirts from all manner of disreputable sources. The mark up on the shirts would have been more than enough to cover the costs and still give the bands a healthy margin had the campaign been followed through. However, during the short period that the Argentine shirts were imported and sold, Ethical Threads could justifiably claim that their products were ‘clean’ in contrast to the vast majority of those sourced by other supposedly ‘ethical’ or ‘sustainable’ fairtrade brands whose supply chains do not stand up to scrutiny.
Sadly, GMB London and BWTUC have not been able to maintain the principles of their Ethical Threads brand; they no longer put workers rights at the centre of their mission by sourcing from workers co-operatives in Argentina, or even unionised factories elsewhere. Instead, as their website states, they re-label generic clothing supplied via a third party importing from the Continental Clothing Company in Tamil Nadu, India where there are neither co-ops nor trade unions.
Continental Clothing, despite claiming on its website that ‘It [our factory] is recognised as one of the best factories in the whole of India in terms of health and safety, labour standards, workers welfare and environmental protection practices’, admitted when questioned several years ago that there was no independent trade union or any form of collective bargaining at their plants. It is striking that the statement ‘it is recognised…’ does not identify who does the ‘recognising’. Apparently not the factory’s own workers.
Across the world, the garment industry is notorious for the ill-treatment of workers in neo-colonial supply chains who are at the mercy of international brands making huge profits at their expense. The interruption to trade engendered by the Covid epidemic vividly demonstrated that workers in the global South are as disposable as the cheap clothes they make when, in most cases, their corporate buyers in the USA and Europe simply abandoned them until business could be resumed.
An unjust system
What this goes to show is that the entire global garment trading system is based on unjust, imbalanced terms of trade giving rise to an abusive dependent relationship between impoverished producer countries and their Western buyers. Consequently, while well-meaning efforts to improve conditions for exploited garment workers in Bangladesh, China, Honduras and elsewhere by raising consciousness amongst Western consumers are to be encouraged, the underlying problems will only be resolved by the elimination of a globalised, profits-based system and its replacement by a more equitable and sustainable model.
Here in the UK, perhaps the only body that can claim to source clothing from unionised factories on the Indian sub-continent but who also understand the need for radical change is No Sweat (https://nosweat.org.uk/t-shirts/) and it is a shame that more trade unions and progressive organisations do not use their products rather than relying on commercial clothing businesses that have, at best, dubious ethical credentials.
Back in Argentina, before Milei, the garment industry, though by no means perfect, was one of the few in the world that was largely self-sufficient. It had survived the politics of the military dictatorship, the hyperinflation of the Alfonsín government that followed it and the indiscriminate opening of the import market by the right wing Macri administration elected in 2015. A process of automation and mechanisation cost many jobs but at least enabled it to continue to trade in an internal market of 47 million inhabitants. How much of it will survive another three years of Milei’s onslaught on domestic enterprise remains to be seen. In every sense of the phrase, the fabric of the nation is being torn apart.
Main image: ‘Textile production is falling in Argentina. Photo: Fashion Network
Bert Schouwenburg is a trade union advisor. He was formerly in charge of international affairs at the GMB union where he established and maintained close links with unions on Latin American tropical fruit plantations as well as representing the ETUC on EU-Latin America trade bodies. He has lived, studied and worked in several Latin American republics and has had numerous articles printed in a variety of outlets.