THE WINNERS AND LOSERS FROM TRADE
The analysis of an exporting country yields two conclusions:
Domestic producers of the good are better off, and domestic consumers of the good are worse off.
Trade raises the economic well-being of the nation as a whole.
How Free Trade Affects Welfare in an Importing Country
The analysis of an importing country yields two conclusions:
Domestic producers of the good are worse off, and domestic consumers of the good are better off.
Trade raises the economic well-being of the nation as a whole because the gains of consumers exceed the losses of producers.
The gains of the winners exceed the losses of the losers.
The net change in total surplus is positive.