barter

(redirected from Barter trade)
Also found in: Dictionary, Thesaurus, Legal, Encyclopedia.

Barter

The trading/exchange of goods or services without using currency.

Barter

To trade one item for another of roughly equal value. That is, bartering occurs without a medium of exchange like money. For example, one may trade 10 apples for 10 oranges. Bartering exists in all societies, though it is less common than monetary transactions. See also: Horizontal Security Exchange, Payment-in-Kind.

barter

an exchange mechanism for buying and selling goods and services which involves the physical ‘swapping’ of one product for another. Generally, barter is a cumbersome and inefficient means of organizing exchanges in an economy, since a large amount of time is wasted in seeking out and finding compatible ‘swap’ partners (i.e. each selling what the other wants to buy), and then haggling over an appropriate exchange rate (for example how many tomatoes equal a sewing machine?). All these difficulties can be overcome by the use of MONEY as a common denominator to conclude transactions and ‘price’ individual products.

For all its disadvantages, barter (or COUNTERTRADE as it is often referred to) is still widely used in the context of INTERNATIONAL TRADE. Firms which are unable to obtain the necessary foreign currencies they require to finance a trade deal (because the government operates FOREIGN EXCHANGE CONTROLS or because the country has simply run out of currencies due to a balance of payment deficit), often enter into a bilateral ‘swap’ deal with firms in other countries arranging a suitable product exchange.

barter

the EXCHANGE of one economic good or service for another. Barter as an exchange mechanism, however, suffers from a number of serious disadvantages:
  1. for barter to take place, there must be a ‘coincidence of wants’, that is, each party to the barter must be able to offer something that the other wants. For example, an apple-grower wishing to obtain oranges must not only find an orange-grower but must particularly find an orange-grower wishing to acquire apples. Finding appropriate exchange partners can involve lengthy search activity, which reduces the time available for actually producing goods;
  2. even if the parties meet up, they then have to agree on an appropriate ‘rate of exchange’, for example, how many apples are to be exchanged for one orange? Haggling over exchange terms is again time-consuming, and where agreement cannot be reached between the two parties each will then have to seek out new exchange partners.

Overall, barter is a very inefficient means of organizing transactions in an economy and has been largely superseded by the PRICE SYSTEM in modern economies, using money as a medium of exchange. See COUNTERTRADE, BLACK ECONOMY

References in periodicals archive ?
Seven state enterprises and government agencies in Thailand, including the Telephone Organization of Thailand, the Royal Air Forces and the Electricity Generating Authority of Thailand, were involved in barter trade deals, while 13 private enterprises, including Thailand's Charoen Phokphand group and Japan's Itochu Corp.
On the return of barter trade, the President has given the green light to the revival of the ancient trading practice in Mindanao.
According to him, suspension of barter trade was bound to worsen economic woes of Kashmiris.
Shortly after his announcement, he had directed Finance Secretary Carlos Dominguez to implement the barter trade system in Zamboanga, Basilan, Sulu and Tawi-Tawi (Zambasulta) areas, where goods from Sabah, Malaysia are usually traded.
President Duterte made the pitch for bilateral cooperation in barter trade with Malaysia during the summit talks attended by Malaysian Prime Minister Mahathir Mohamad in Bangkok last Sunday.
The barter trade point the diplomat emphasised upon needs to be looked into because it is not Iran alone which stands to benefit from it.
Presidential spokesman Harry Roque said the terms of a barter trade should be acceptable to the parties involved and should not favor just one side.
The FPCCI president said that Pakistan can import quality pharmaceuticals and steel from Iran while export rice, meat, mutton, fruits and vegetables while chances of barter trade can also be explored.
Russian Deputy Foreign Minister Sergei Ryabkov said last week that Moscow and Tehran had started barter trade through supplying Iran with Russia's grains, equipment and construction materials in lieu of Iran's crude oil.
ISLAMABAD -- Finance Minister Ishaq Dar stressing on promoting Pak-Iran barter trade has said that trade with Iran will be enhanced while remaining within the ambit of UN sanctions.
He said there is need to build mutual confidence to overcome the impediments in barter trade and commodity exchanges enabling the two countries to benefit from their proximity and neighborhood.
Defying the US pressure, Pakistan and Iran have signed a barter trade deal during a visit of Pakistani delegation to Iran last month.