It is obivios at least some trade was conducted between the "light" and "dark", nations, as there were at least some goods amoung the free people which could only habe been obtained from such trade. For example I seem to recall Tolkeing saying I think it was in the UT version of "tour and his coming to gondlin" that one of the great Gondolin swords (Glamidring I believe) had either a hilt or sheath made of "ruel bone" which Tolkein notes as being the middle earth term for ivory. This ivory would have (probably) had to come from elephants (Mumakul) which unless, they ranged far wider in the first age than in the third, would mean at least some trade with the people of the lands which later became Far Harad even among the elves. I suppose the ivory could of been walrus too but that would mean trade with the Forodwaith who seemed to have little to do with the outside world even in the first age.
Beyond the "look the other way" trade suggested I would imagine that at most border lands there were trading posts and "free cites" places swaring allegiance to nethier The west nor the east, but allowing merchants from either to meet in (comparitive) safety and security.
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