I In discussions on the possible effects of trade liberalisation in the framework of the Kennedy-round, attention has been focused on the short-run problems of adjustment and the consequences for the balance-of-payments of the countries participating in the negotiations. At the same time, little attention has been paid to the enduring e2ects of trade liberalisation: the reallocation of resources following the freeing of trade barriers. In the present paper, we propose to examine the latter problem.

Since the reallocation of resources depends on comparative advantage, we have to ascertain where the comparative advantage of industrial countries lies in their trade with each other. One possible solution would be to make comparisons on the basis of a production census undertaken simultaneously-and using identical methods of investigation-in all countries. In practice, production censuses have been conducted at different times, using different methods of inquiry, and sufficient information for making intercountry cost-comparisons has not been made available.