Question

Who wins and loses with trade?

Answer 1

With trade, in importing country, world price must be less than it's before trade equilibrium price. And at this lower world price, domestic consumers are the winner because they now can consume more but pay less than they were paying at before tax equilibrium. But, domestic producers, workers who produces the goods that are now being imported, are the losers because they now get much less price than they're before trade opens up. However, because of trade, the change in consumer surplus is more than the change in producers surplus and therefore total nation as a whole is better off because of trade.

In the exporting countries however, as the world price is greater than it's before trade market equilibrium price, therefore Consumers are the losers here because Consumers surplus decreases. Producers are the winners because they now get more price for their products. Here, gain in producers surplus is greater than loss in Consumers surplus, and therefore the nation is better off overall.