Many Goods

In the real world, most countries produce many goods, not just two. And, of course, more than two countries engage in trade. Thus we may find that Japan exports cars to America, America exports bulldozers to Saudi Arabia, and Saudi Arabia exports oil to Japan. This is called "multilateral trade," while trade between two countries without any trade with other countries would be called "bilateral trade." What we see in the real world is multilateral trade in many different goods and services.

Again, the two-good, two-country assumption is just a simplifying assumption. In the real world there are many countries and many goods, and multilateral trade; but it is still true that each country will have a comparative advantage in at least one kind of good, and will benefit by exporting that good and importing others. Thus multilateral trade can be beneficial to all participating countries.

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