Gains from trade and the size of a country

Who gains more from trade—the small country or the large country? In the standard Ricardo–Mill two-country model the small country reaps all the gains from trade and the large country (the rest of the world) gains nothing. The present paper considers this question of the distribution of gains from trade between the large country and the small country in terms of a multicountry framework. In this altered setting it is shown that the distribution of gains will generally be independent of the size of the country so long as there is universal free trade. With trade restrictions the presumption, if there is any, would rather be in favour of the large country gaining more than the small country.