countertrade


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Countertrade

See: barter

Countertrade

The exchange of goods and services for other goods and services. Countertrade is relatively common in trade with or between cash-poor countries. Most economists estimate that countertrade accounts for between 20% and 25% of global trade volume. See also: Buyback, Switch trading, and Counter purchase.

countertrade

the direct or indirect exchange of goods for other goods in INTERNATIONAL TRADE. Countertrade is generally resorted to when particular FOREIGN CURRENCIES are in short supply, or when countries apply FOREIGN EXCHANGE CONTROLS.

There are various forms of countertrade, including:

  1. BARTER – the direct exchange of product for product;
  2. compensation deal - where the seller from the exporting country receives part payment in his own currency and the remainder in goods supplied by the buyer;
  3. buyback - where the seller of plant and equipment from the exporting country agrees to accept some of the goods produced by that plant and equipment in the importing country as part payment;
  4. counterpurchase - where the seller from the exporting country receives part payment for the goods in his own currency and the remainder in the local currency of the buyer, the latter then being used to purchase other products in the buyer's country See EXPORTING.

countertrade

the direct or indirect exchange of goods for other goods in INTERNATIONAL TRADE. Countertrade is generally resorted to when particular FOREIGN CURRENCIES are in short supply or when countries apply FOREIGN EXCHANGE CONTROLS. There are various forms of countertrade, including:
  1. BARTER: the direct exchange of product for product;
  2. compensation deal: where the seller from the exporting country receives part payment in his own currency and the remainder in goods supplied by the buyer;
  3. buyback: where the seller of plant and equipment from the exporting country agrees to accept some of the goods produced by that plant and equipment in the importing country as part payment;
  4. counterpurchase: where the seller from the exporting country receives part payment for the goods in his own currency and the remainder in the local currency of the buyer, the latter then being used to purchase other products in the buyer's country. See EXPORTING.
References in periodicals archive ?
97) The most prevalent type of countertrade, counter-purchase,
The general literature on trade, countertrade, and barter (non-defense industries)
The most common of those measures would be countertrade by which System Operator orders up-regulation of some power plants in the region of deficit when incidents in transmission network occur that limit the power transmission capability.
With sales in excess of $100m per annum, Degere's business is focused on the former Soviet Union and includes countertrade deals.
Later he held the title of deputy PM for executive affairs in charge of Iran's oil barter deals with foreign states and companies under a countertrade system started in 1982.
This may occur in order to gain competitive advantage from offshore suppliers' superior quality and higher technology inputs or processes; to be able to acquire components and materials needed in the shorter product development and life cycle environment; and to offset local content requirements, currency restrictions, and countertrade (Bozarth, Handfield, and Das 1998; Alguire, Frear, and Metcalf 1994).
Developing countries lacking dollars or "hard" currencies follow Venezuela's lead and begin bartering their undervalued commodities directly with each other in computerized swaps and countertrade deals.
For Crone may well be right, at least in part, when she asserts that the early Makkans did not export vast amounts of gold and silver; although, in an age of bulk bullion transactions, the linguistic distinction between gold "exported" in countertrade for other goods, and gold used as "currency" to purchase other goods, may not be commercially significant.
This changed in 1999, however, which was a key period in the transition from the barter of countertrade relations to the real cash-supported relations.
There will also be seminars on tracking systems, benchmarking freight rates, innovative funding techniques, minimising risk and a practical guide to countertrade.
Bilateral trade ran into billions of dollars and was often conducted under the barter and countertrade arrangements.