It's one of those difficult issues, because the virtually free clothing tends to kill the local industry but it also puts clothes on people who could never afford to buy what was being made locally. You might end up with a better clothing industry but more people in poverty because of the cost of clothing. There are few easy solutions and most obvious problems or solutions have nuances that only come to light through time or careful thought. No one ever expected that sending wasted materials from developed countries would hurt the local economies when they started doing it, they just saw it as a way to get a tax write off and help some poor people. What's the saying... "No good deed goes unpunished?"

Yes, I believe places like Goodwill ship unwanted clothing abroad by the bale (literally).