The sentence uses the form 'that allow to each', which is incorrect and needs improvement. Given the context, the only correct form here can be 'that allows each' for the following reasons: The first part of the sentence 'Bilateral rights refer' - The verb form 'refer' here is in Simple present tense. ​So, to maintain the Simple Present tense throughout the sentence - 'allow' is the correct verb form. Thus, option 1 can be eliminated. Now, we have to choose a correct relative pronoun that will represent the noun 'an agreement' - By this relative pronoun, 'an agreement' will be referred to. Relative Pronoun 'that' refers to 'an agreement' which is singular. an agreement between two countries that allows Noun referred to by Relative Pronoun The usage of preposition 'to' after 'allow' is incorrect. Correct sentence: Bilateral rights refer to an agreement between two countries that allow each other's airlines to operate services with a specific number of seats.