Discuss and evaluate the proposition that trade is beneficial to all trading partners?

Answer 1

Mr A produces milk Mr B produces meat Mr C makes bread Mr D makes cups knives so you can see by trading each can share and utilize the products of the others eg Mr A can sell his meat for milk, bread, knives and cup then drink the milk from a cup and cut the bread and his own meat with the knife - on an international scale and with the variety of international products and produce it makes for a higher standard of living for everybody

Answer 2

When trade is increased between countries both countries benefit as a whole, but within each country the will be winners and losers. There will be enough gains from trade to compensate the losers but as a practical matter it is rarely done. If everybody were better off there would not be groups that opposed an increase in trade. Whether the losses suffered by workers is short or long term depends on how flexible the are about changing jobs.
For example, if 2 countries makes products A and B, but one country's productivity ratio A/B is 2 and the others is 1, then the consumers in both countries would be better off if county one made more A and less B and country 2 made more B and less A. The price of B would fall and the price of A would rise in county one and the reverse would happen in country two. But the workers in county one who made B and in county two who make A might be worse off Their gains as consumers may be less than their loss in wages that would occur from the decrease in the price of there product due to the additional competition.