Brief notes on the Gains from International Trade


It is customary to treat ‘gains from international trade’ different from ‘advantages of international trade’. While discussing ‘gains from international trade’, we generally illustrate with the help of geometry and numerical examples the superiority of post-autarky (i.e., with trade) situation over autarky (i.e., without trade) situation.

On the other hand, the ‘advantages of international trade’ deal with the description of case for free trade versus protected trade.

International trade as well as gains from trade is possible only under differing commodity exchange ratios or terms of trade between countries. In fact gain in terms of trade is the gain of international trade.


International trade, on the basis of comparative advantage, leads to international specialization (i.e., interna­tional territorial division of labour), which, in turn results in (a) optimum allocation of resources, (b) maximisation of production, (c) increase in efficiency, and (d) improvement in consumption levels?

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