Pre-Trade Position
Exporter
Se0
De0
Pe0
Qe0
Importer
QI0
SI0
DI0
PI0
Prior to trade the
country on the left consumes Qe0 of the product at price Pe0 while the country on the right consumes Qi0 of the product at price Pi0
The price for the commodity
for the country on the left is lower that the price for the country on the right