ABSTRACT
The standard analysis of trade gains is based on the assumption of constant returns to scale, the absence of externalities, public goods, asymmetries of information and commodity taxes, freedom of entry and, therefore, perfect competition. If those conditions are satis®ed in a country then the opportunity of that country to trade freely is potentially bene®cial if and only if compensated trade actually takes place. On the other hand, it is well known that if all countries are identical in all respects and if, in addition, entry to some industries is so restricted that the structure of the associated commodity markets is oligopolistic then the opportunity to trade may be bene®cial even if, in equilibrium, no trade takes place.
