What is the result of specialization in trade?

Specialization in trade leads to a net gain for both trading partners because it allows each party to focus on producing goods and services for which they have a comparative advantage. By concentrating on what they do best, each party can increase their overall productivity and efficiency. This results in a greater overall output and an increase in trade benefits, as they can exchange surplus goods for those they need, often at a lower opportunity cost than if they tried to produce everything on their own.

This process fosters economic interdependence, where both trading partners benefit from access to a wider variety of goods at lower prices due to increased efficiency and production capabilities. As a result, both economies experience growth and improved standards of living, underscoring the advantages of specialization in trade.