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I think you're right about the cultural loss under colonization, but I'm not sure whether trade theory can apply here - its usually used in the context of free trade between autonomous nations. If the trade takes place under colonialism then I guess its quite possible this would distort the benefits and lead to a much more one-sided situation. I'll think about that over breakfast
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Right on. It was essentially my point that the effects of colonialism are broader than can be conceived by economics and nationalist politics, and that the accompanied exploitation is always more than financial (and thereby outside of what little I know of trade theory). I already know which side generally comes out on bottom in the clash of cultures, but I'd still be interested in the extent and quality of economic benefit as predicted by trade theory.
(And I'd be happy to fill anyone in on cultural hegemonic domination in colonialism if that's not an assumption you're comfortable with)