|Published (Last):||3 February 2004|
|PDF File Size:||3.5 Mb|
|ePub File Size:||11.69 Mb|
|Price:||Free* [*Free Regsitration Required]|
Countertrade can be classified into three broad categories: barter, counterpurchase, and offset. In any form, countertrade provides a mechanism for countries with limited access to liquid funds to exchange goods and services with other nations. Countertrade is part of an overall import and export strategy that ensures a country with limited domestic resources has access to needed items and raw materials. Bartering is the oldest countertrade arrangement. For example, a bag of nuts might be exchanged for coffee beans or meat.
In an offset arrangement, the seller assists in marketing products manufactured by the buying country or allows part of the exported product's assembly to be carried out by manufacturers in the buying country. This practice is common in aerospace, defense and certain infrastructure industries.
An offset arrangement may also be referred to as industrial participation or industrial cooperation. Other benefits include lower unemployment, higher sales, better capacity utilization, and ease of entry into challenging markets.
Other disadvantages of countertrade include complex negotiations, potentially higher costs and logistical issues. Opportunities for trade advancement, shifting terms, and conditions instituted by developing nations could lead to discrimination in the marketplace.
An offset is a countertrade agreement in which a company offsets a hard currency purchase of an unspecified product from that nation in the future. Compensation trade is a form of barter in which one of the flows is partly in goods and partly in hard currency. Key Takeaways Countertrade provides a mechanism for countries with limited access to liquid funds to exchange goods and services with other nations. A major benefit of countertrade is that it facilitates the conservation of foreign currency.
Common disadvantages of countertrade are complex negotiations, higher costs, and logistical issues. Compare Accounts.
The offers that appear in this table are from partnerships from which Investopedia receives compensation. Barter or Bartering Definition Barter, or bartering, is the act of trading a good or service for another good or service without the use of money. What Is Trade? A basic economic concept that involves multiple parties participating in the voluntary negotiation. Brexit Definition Brexit refers to Britain's leaving the European Union, which was slated to happen at the end of October, but has been delayed again.
Trade War Definition A trade war arises when one country retaliates against another by raising import tariffs or placing other restrictions on the other country's imports. Learn What Exports Are Exports are those products or services that are made in one country but purchased and consumed in another country. Partner Links. Related Articles. Economics What Is International Trade? Debt With Treasury Bonds.
Exporting, Importing, and Countertrade
Find Flashcards. Browse over 1 million classes created by top students, professors, publishers, and experts, spanning the world's body of "learnable" knowledge. AP Exams. GCSE Exams.
Exporting, Importing, and Countertrade Flashcards Preview
Countertrade can be classified into three broad categories: barter, counterpurchase, and offset. In any form, countertrade provides a mechanism for countries with limited access to liquid funds to exchange goods and services with other nations. Countertrade is part of an overall import and export strategy that ensures a country with limited domestic resources has access to needed items and raw materials. Bartering is the oldest countertrade arrangement.
Exporting is a way to increase mar. Export and Countertrad Exporting, Importing a Lecture 11 - Importing Exporting and Importin