Set out what dropping trade barriers is likely to do to capital investment and profits, to jobs and wages, and to growth in each economy concerned

Removing trade barriers raises growth through specialisation by comparative advantage, larger markets with economies of scale, cheaper inputs, the spread of technology and competition that forces efficiency. With free capital flows, capital moves from capital-rich to capital-poor economies where returns are higher, raising investment, wages and growth in the poorer economy and speeding convergence, while investors from the richer economy earn higher returns abroad. The gains are uneven. Workers and firms in industries that lose protection face lower wages, job losses and falling profits while resources shift to competitive sectors, and short-run adjustment costs can be large. The trap is assuming every group gains: overall welfare rises, but each economy has losers.