The likelihood that economic developments in one country may negatively impact international
transactions. Suppose Country A and Country B enjoy a
free trade agreement, which greatly increased
trade between the two nations. A protectionist party may be elected to office in Country B and immediately revoke the FTA. Not only will this affect business, perhaps both positively and negatively, within Country B, but exporters from Country A will suddenly find that their
investments have evaporated. See also: Country political risk.