Sabrina provided a link to a 1997 New Internationalist article discussing the well-known episode in which threatening Bangladeshi garment manufacturers with an import ban resulted in thousands of child laborers losing their jobs and turning to even worse sources of income such as prostitution. Though the case is frequently mentioned in pro-globalization books and articles, the presentation in NI is much richer:
No photographs. Saleha is scared. Many a time she has hidden under tables, been locked up in the toilet, or been sent to the roof in the scorching sun for two or three hours. It happens whenever foreign buyers enter the factory. She knows she is under-age, and doesn’t want photographers messing things up – she needs the job. The whole industry has suddenly become sensitive. Owners want their factories open. The workers want their jobs. The special schools for former child labourers want aid money. No photographs…
The child workers themselves find it particularly hard to interpret the US approach as one of ‘humanitarian concern’. When asked why the buyers have been exerting such pressure against child labour, Moyna, a ten-year-old orphan who has just lost her job, comments: ‘They loathe us, don’t they? We are poor and not well educated, so they simply despise us. That is why they shut the factories down.’ Moyna’s job had supported her and her grandmother but now they must both depend on relatives…
The notion that a garment employer might be helping children by allowing them to work may seem very strange to people in the West. But in a country where the majority of people live in villages where children work in the home and the fields as part of growing up, there are no romantic notions of childhood as an age of innocence. Though children are cared for, childhood is seen as a period for learning employable skills. Children have always helped out with family duties. When this evolves into a paid job in the city neither children nor their families see it as anything unusual. In poor families it is simply understood that everyone has to work.
Trade Diversion 
There’s a very useful update on child labour in the cotton industry available on the New Internationalist Australia site at http://www.newint.com.au/shop/5-fair-trade-news-ft203.htm
But it can be done right! The story of the Chetna Organic Cotton Project indicates just what can be achieved when there is a true partnership between producer, manufacturer and retailer – http://www.newint.com.au/shop/rajlakshmi-p47.htm
It seems that a good strategy is to avoid buying from big corporations. Their driving force is the profit motive. Better instead to buy goods from small traders and non-profit organisations. Their motivation is more likely to be a fair deal for commodity producers and their families. They’re also more likely to be involved with small-scale producers who intrinsically have more concern for the land, are more likely to use organic production methods and are less likely to exploit children.