If one country has a lower cost of production for a good than another country, then it is said to have an absolute advantage in the production of that good.
International trade will take place even if a country has no absolute advantage in the production of any good. So long as they have comparative advantage in the production of one good, international trade can be advantageous.
The terms of trade will determined whether trade is advantageous for a country.
Comparative advantage exists due to different factor endowments and production technology.
Trade can occur not only because of the difference in product price, but also because of non-price competition. This leads to intra-industry trade will satisfy consumers’ love of variety.