The classical Heckscher-Ohlin-Mundell paradigm states that trade and capital mobility are substitutes, in the sense that trade integration reduces the incentives for capital to ow to capital-scarce countries. In this paper we show that in a world with heterogeneous nancial development, the classic conclusion does not hold. In particular, in less nancially developed economies (South), trade and capital mobility are complements. Within a dynamic framework, the complementarity carries over to ( nancial) capital ows. This interaction implies that deepening trade integration in South raises net capital inows (or reduces net capital outows). It also implies that, at the global level, protectionism may back re if the goal is to rebalance capital ows, when these are already heading from South to North. Our perspective also has implications for the e¤ects of trade integration on factor prices. In contrast to the Heckscher- Ohlin model, trade liberalization always decreases the wage-rental in South: an anti-Stolper- Samuelson result.