Even when one potential trading partner has an absolute advantage in production of all goods and or services, we have learned that gains from trade can still be realized. As long as there are differences in opportunity costs, comparative advantage exists and specialization and trade will still yield gains.

    The only case in which gains from trade could not be realized would be the somewhat unlikely case in which all potential trading partners have identical opportunity costs. As we shall see in section 4. Terms of Trade, the actual outcomes from trade depend on both agreed to terms and quantities traded. Finally, as we will see in section 5. Trade Restrictions, gains from trade can be diminished or lost completely due to trade restrictions. We will also briefly look at some of the arguments for trade restrictions.

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