Answer

The taylor (spelling reflects Adam Smith's time) has special skills that enables him/her to produce clothes whereas the shoe maker has special skills in the production of shoes. Through trade both the shoemaker and Taylor gain (more clothes for shoemaker and more shoes for the Taylor). Like the Taylor and the shoemaker, the colonists and the Europeans each produced what they could produce best with their individual resources that the other party wanted. By trading, both parties, the Europeans and the colonists, were better off.