Bilateral trade refers to the exchange of goods and services between two countries. This type of trade allows each country to benefit from the strengths and resources of the other, often leading to improved economic relations. For example, if Country A has a surplus of agricultural products and Country B specializes in technology, they can trade these goods to meet each other's needs. Governments often establish trade agreements to facilitate bilateral trade, reducing tariffs and other barriers. These agreements can enhance cooperation and promote economic growth, benefiting businesses and consumers in both nations.