As a consequence, workers find they can earn a better living making cloth, where their comparative productivity is higher, and so quit the vineyards for the mills. Likewise, Portuguese textile production disappears. But in fact we can use our demand technology to state more. For example, one possible outcome is that Portugal will export 30 casks of wine and import 10 bolts of cloth. Furthermore, incomes are higher in both countries.
All workers benefit from trade everywhere .
Obviously, anything that interferes with trade then hurts everyone. But mostly we'll look at tariffs and quotas and VERs and AD suits and other pieces of alphabet soup.