countertrade

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Countertrade

See: barter
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

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.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
Production units in a strictly export-constrained node that have a higher marginal cost than their competitive nodal price can sell their power in the zonal market at the zonal price and then buy it back at a lower offer price in the counter-trade stage.
The Russians agreed to supply a light-water nuclear reactor in a counter-trade deal with part payment in rice, teak, and rubber, and in June 2001 a contract was drafted (Luchin 2002; Lintner 2002).
He agreed to a counter-trade deal in palm oil and an offset programme which would allow local manufacturers to provide spare parts for the MiG-29.
In terms of arms sales, Russia's success with Malaysia was promising but in comparison with the long-term deals Russia had negotiated with China and India it was less rewarding than expected, considering the highly unpopular counter-trade agreement that was required.
Putin became Russia's premier arms salesman exploiting price advantages and the incentive of counter-trade deals to exploit new markets in ASEAN.
In December 2003 Vietnam purchased four SU-30MKs for a total of US$150 million, of which 30 per cent was counter-trade. In terms of arms sales Vietnam had purchased the same Sukhoi version as China and planned to purchase a total of 12 to reach a full squadron.
Treasury Specialist, then Manager of Foreign Exchange; 1986, Assistant Treasurer; 1989, headed The Coca-Cola Trading Co., a barter and counter-trade organization dealing with Hungary, Yugoslavia, Poland and China and Africa, traveling about 50 percent of the time; 1992, started a global procurement organization, merging it with the trading company; 1993-present, Treasurer.
As key trading partners such as Indonesia and Malaysia solve economic and political problems, counter-trade is likely to grow, according to Mr Pardo.
At Akbar Associates, Zia heads the barter, counter-trade and general trading divisions.
Due to the stalemate, which arose in negotiation with the International Monetary Fund, the former government embarked on a series of counter-trade agreements, Nigerians were forced to buy goods and commodities at higher prices than obtained in the international market.
"Offset programmes in the Middle East are undergoing tremendous changes to reflect evolving national defence requirements and the increasingly sophisticated approaches to offset and counter-trade operations worldwide," said Saif Mohammad Al Hajeri, Tawazun's Chief Executive Officer.
The conference also aims to identify best ways to strengthen cooperation and share information within the offset and counter-trades global culture.