Pops wrote:They are each better off because instead of a surplus they have something they did not have before, they traded their profit (surplus) for something of value.
Absolutely. The only qualifier - is that they did have this "something" before, because the staticism of the system pre-supposes that the system has been in this state over a long-term (essentially, over infinity, for the modeling purposes) and settled for equilibrium.
At the stage where they first met each other and started their exchange they could actually make some "profit" for a while, until they settled for equilibrium. And their living standards rose, as a result.