Static and dynamic gains from trade are the theoretical reasons that explain why countries embark in free trade, expecting this to promote industrialization and development. There is nothing, however, in the conventional theory of international trade that guarantees that these gains will materialise and even when they do so they might not accelerate industrialization and growth. This is because, there are a number of deleterious effects that the same theory omits and/or ignores. They refer to, inter alia, the monetary effects of trade specialization on the balance of payments, loss of policy autonomy, deindustrialization and jobless growth. When the costs of free trade overwhelm its benefits, the retarding of industrialization and development are the likely results. To avoid this, gradual openness and government intervention are necessary. In this paper, by contrasting the experiences of China and Mexico since trade liberalisation took place in these economies, the arguments mentioned are supported. The comparison sheds light on the sort of policies that both opened and still closed developing economies must currently implement if they want to reap the static and dynamic gains from trade, thus make real economic progress.