Yeah, I have a little trouble defining this with precision as well, but it seems in the neighborhood of a backhanded compliment, typical of B&A material. I don't know how many of you all have access to the full article on JSTOR, but it actually references the term's use on Burns and Allen:
American Speech 12 (1937): 76 prints a letter from Mamie Meredith in which she reviews the documentation of trade-last to date, pointing out that "Gracie Allen's frequent employment of it on the radio has ... brought it to public notice recently." Meredith laments the fact that "trade-last is not defined in dictionaries, English or American," and adds, with understandable reservations, "An explanation I have heard, though it does not sound convincing, is that the term derives from shoemakers. When shoes were made by hand the cobbler found it convenient to borrow lasts from friendly competitors." She notes in closing that the abbreviated form TL is still used by the younger generation, at least in rural Nebraska.
And, one more amusing quote from the article, hoping I'm not pushing the fair-use boundaries:
I found a possible explanation of the real origin of the expression, and a very curious one. In a discussion of Jewish terms used among shoe salesmen as reported by David Geller . . . [American Speech 9 (1934): 283-86], T.L. is said to serve as an abbreviation for the Jewish tochos lekker (backside kisser)." Fleece apparently did not consult David Geller's original article. The terms discussed in the article are not exclusively Jewish, as he believes, and TL does not appear in the article at all but in Addenda compiled by J. S. Fox (p. 286). Fleece concludes, "There is certainly a definite relation between the two uses of T.L., as the childish offer to trade compliments is certainly a naive form of 'apple-polishing.' Tochos lekker is at least as good as 'trade last,' as an explanation of the children's T.L. The vulgarity of the Jewish term would also explain the abbreviation to the initial letters, a rather unusual form."