This theory explains why there is international trade between North and South, eg semiconductors going from the USA to Brazil, and coffee going in the opposite direction But it does not explain the fact that over 75% of the exports of the advanced industria countries go to other similar advanced nations, with similar resources, wage rates, and levels of technology, education, and capital. It is more a historical accident than a result of natural resources that the US leads in building aircraft, semiconductors, computers and software, while Germany makes luxury automobiles, machine tools and cameras