With two or more countries, free trade then proceeds until the prices of exports are equal across countries.
First described concretely by Robert Torrens in Essay on the External Corn Trade, one famous argument against it is the "infant industry" argument.  When it is not being followed, the world is not operating on its PPC. Classically, it assumes that labor is the only input, that goods are homogenous across firms, and that transportation costs are negligible, meaning that it is profitable to export. With two or more countries, free trade then proceeds until the prices of exports are equal across countries. Frequently illustrated with the example of English cloth and Portuguese wine this is, FTP, what theory which states that countries should produce and export those goods which for them have the lowest opportunity costs.
First described concretely by Robert Torrens in Essay on the External Corn Trade, one famous argument against it is the "infant industry" argument.  
comparative advantage