A bilateral trade agreement is a contract between two countries that outlines the terms of trade between them. This agreement typically aims to reduce or eliminate tariffs, quotas, and other trade barriers, making it easier for goods and services to flow between the two nations. By fostering trade, these agreements can enhance economic cooperation and strengthen diplomatic relations. Countries often negotiate these agreements to promote exports and imports, benefiting their economies. For example, a bilateral trade agreement between Country A and Country B might allow Country A to export agricultural products while Country B exports manufactured goods, creating a mutually beneficial trade environment.