A lot of people around here seem to think "economically rational" is the same thing as "ethical". In a lot of places and times in the world (including US cities in the early 20th century), due to crushing poverty and a glut of labor it has been economically rational for people to accept work in factories with horrific working conditions for wages that will barely feed them. That includes where they're physically locked into massively unsafe buildings. Such as the Triangle Shirtwaist Factory. That doesn't make the practice of offering jobs in such conditions ethical.
"Ethical" in these situations aren't black and white objective affairs. The relevant metric is that whether pushing the levers we have available to us as consumers, even policy makers, in the rich west, affects a more or less ethical outcome in the end.
We emphatically do not have the tools in our possession to make billions of people in south east Asia rich enough and educated enough in one stroke to avoid the situation you're describing ("crushing poverty and a glut of labor"). The one tool we do have to affect such an outcome, although slower than is desirable, is trade - and revoking that trade is pretty much the only lever we have to push, and the outcome for these people will be drastically worse.
That doesn't mean that there can't exist actions that businesses and individuals could and should take to improve matters, but step 0 is realising that those are drops on the ocean: We're not going to fix this wholesale, except by trading as much as possible.
By no means would I suggest cutting off trade as the solution to these problems (not sure why you jumped to that particular idea). Just saying that we shouldn't be satisfied with having our clothes and electronics made in death-trap sweatshops or factories where they're exposed to toxic chemicals (or any number of other ethical violations related to hours worked, overtime pay, or even freedom to leave) just because sweatshops are better places to make a living than trash heaps.
That's not the only choice available. We can still pressure brands to pressure factories to provide humane and safe working conditions, and hell - is it too much to ask for brands themselves (and the purported human beings working there) to make ethical choices without threat of bad press?
