Problem: In the manufacturing sector, Japanese labor productivity is roughly the same as that of the United States (higher in some industries, lower in others). However, the United States is still considerably more productive in the service sector, with most services being nontraded. Some analysts have argued that this poses a problem for the United States because its comparative advantage lies in things that cannot be sold on world markets. Explain what might be wrong with this argument. How do nontraded goods affect the possible gains from trade?