The Heckscher-Ohlin (HO) model is a general equilibrium model that shows the impact of different ownership of resources by countries on trade (Feenstra & Taylor, 2011). This model shows a long-run effect since all factors of production can move freely. Various assumptions are made in this model, including:1. Free trade2. Identical technological level of trading partners,3. Identical and homothetic preferences4. Ability of factors to move freely between sectors The HO theorem states that a country will export the good that intensively uses the factor of production it has in abundance and will import the other good. This report will first examine the pattern of imports and exports between two selected countries: Australia and Indonesia. Subsequently, the analysis of the resource endowments of the two countries will be compared with the trade models. Based on our results, conclusions will be drawn about whether the HO Theorem holds up to its main predictions. Finally, any substantial differences in business models will be discussed on a theoretical level. Current Forecast As shown in Table 2 (see appendix), Australia's capital-to-labor ratio is more than 10 times higher than Indonesia's. Based on the HO model, we would expect to see Australia export more capital-intensive goods than Indonesia. Additionally, a developing country like Indonesia is often associated with a large pool of cheap labor, compared to a developed country like Australia. The trade structure will not only be examined using capital and labor exclusively as factors of production. The abundance of resources and the environment also play an important role. Analyzing the structure of trade, Table 1 (see appendix) shows Australia's top 10 imports and exports with Indonesia for the year 201... half of the paper... n is insufficient.ConclusionFirst, we must recognize that any conclusions reached are based on many assumptions and an understanding of the inherent error of the data. Overall, we can say that Australia is more capital abundant than Indonesia. Australia's exports are mainly capital-intensive agricultural goods. As a developing country with abundant and relatively skilled labor, Indonesia may be able to export abundant goods in terms of both capital and labor. We also observe the impact of intra-industry trade in some mineral commodities such as crude oil. An unexplained trade pattern that is inconsistent with the HO theorem has been observed, and more information is needed on how both countries operate. However, we can conclude that the HO Theorem is accurate and that countries export goods that use the factor of production of which they are abundant.