The gains from international trade and international aid in the presence of public goods

It is well known that if the autarkic and free-trade equilibria are perfectly competitive with market distortions limited to non-negative taxes on imports and exports then free trade is potentially (after country-specific lumpsum compensatory transfers) beneficial for each trading country. It can now be shown that, even in a context of public goods of any kind, free trade (after country-nonspecific lumpsum compensatory transfers) is potentially ben- eficial for each trading country, whether or not the countries also extend aid in public goods to each other.