This article develops an analytical framework for examining the issues of trade liberalization and sector prices in the context of international factor movement. The article first describes the main problems that arise in the attempt to measure the effects of trade liberalization when factors are or have been internationally mobile. After examining some of the results obtained with partial and general equilibrium models, the article analyzes the predictable effects of liberalizing trade under a variety of market conditions on the basis of a general equilibrium model of North-South trade and factor movement.