Consider trade between country A and country B. If country A has wages that are substantially less than those in country B,
◦ country B will import from A but will not be able to export to country A.
◦ country B will benefit by placing tariffs on imports from country A.
◦ the pattern of comparative advantage will depend also on the relative productivities of labour in the two countries.
◦ country A will not have to subsidize its export industries.
◦ country A will have an absolute advantage over country B.