when a bilateral trade agreement is set participating countries have access to a greatly expanded market however not everyone benefits from this change equally in particular larger firms are generally better situated than their smaller counterparts 
consider a hypothetical multinational food business headquartered in the u s and with subsidiaries located across the world if the u s established a new bilateral trade agreement that eliminated barriers with another country the multinational might be much better poised to take advantage of this new market as it would likely have the necessary capital to scale up production and transport not only might the multinational s u s competitors struggle to do the same but local businesses in the other country might also find it difficult to compete with the production marketing and human resources of the multinational ultimately this could lead to a system in which there are some winners and losers resulting from the new agreement the bottom linebilateral trade refers to commerce conducted between two countries it is typically facilitated by bilateral trade agreements which are designed to eliminate common barriers such as tariffs quotas or other restraints bilateral trade agreements can help to standardize business regulations and practices across different regions and increase economic strength of participating nations however expanded markets may benefit larger firms over smaller players leading to closures of some businesses 