Output and productivity levels rise when resources shift to more efficient sectors of the economy as tariffs reduce. In a previously tariff-protected sector, imports will be cheaper and can be expected to expand their share of the market. Domestically-focused firms with higher cost structures as a consequence of tariff protection will respond by increasing their efficiency, reducing output sufficiently to reduce their costs or shifting resources into more competitive production. Over time, these processes will lead to greater specialisation and increased comparative advantage. These effects are primarily driven through simple tariff removal, suggesting that countries that liberalise the most are likely over time to benefit the most. At the same time, there are likely to be phases of adjustment and transition that affect sectors in different ways.