No, it's perfectly legal and ethical. Even the big boys do it (Billabong, Zoo York, etc.)
Nope. But a variant would work in Australia - you'd have to do more than just quality control and rip a tag out, but if enough of the production is done locally you don't have to mention the overseas part. Kind of dodgy, and the US is a lot stricter about it.Cool!!! I wonder if that would work in North America.