While companies are trying to optimize their global supply chain, governments are aiming for the protection of their local industries. Popular instruments for governments to accomplish their endeavor are Preferential Trade Agreements such as Free Trade Agreements, custom unions, common markets and single markets. Governments apply them to prevent the labor from moving to foreign countries and to encourage companies to transfer their value adding activities to their domestic economic area (Hirsch, 2002). The number of Preferential Trade Agreements and especially Free Trade Agreements is increasing rapidly. By the end of 2002, the World Trade Organization (WTO) had been notified of the existence of some 250 Free Trade Agreements. At the end of 2008 the number was already 42 1 and in the year 2010 the WTO expects a total number close to 350 of additional Free Trade Agreements implementations, nearly doubling the existing amount (World Trade Organization, 2010). What is your opinion? Word count 300 of 4 Harvard referencing stlye