Table of Contents
When can countertrade be used?
Countertrade means exchanging goods or services which are paid for, in whole or part, with other goods or services, rather than with money. A monetary valuation can however be used in countertrade for accounting purposes. In dealings between sovereign states, the term bilateral trade is used.
Which type of counter trade involves a triangular rather than bilateral trade agreement?
Switch Trading: Defined as a practice in which one company sells to another its obligation to make a purchase in a given country. Switch trading involves a triangular rather than bilateral trade agreement.
What countries countertrade?
A number of countries now include countertrade as an acknowledged and important element in their trade strategy; this extends beyond the socialist countries and the major oil exporters to such countries as Brazil, Pakistan, Malaysia, Colombia, Argentina and Turkey.
What is the difference between offset and traditional countertrade?
As nouns the difference between countertrade and offset is that countertrade is (international trade) exchange of goods or services that are paid for, in whole or part, with other goods or services while offset is anything that acts as counterbalance; a compensating equivalent.
What are the advantages of countertrade?
Advantages of Countertrade
- Allows for entry into difficult markets.
- Increases company sales where you might not otherwise have business.
- Overcomes credit difficulties.
- Allows for disposal of declining or surplus products.
- Gains competitive advantage over the competition.
Why is countertrade important?
Countertrade provides a mechanism for countries with limited access to liquid funds to exchange goods and services with other nations. Bartering is the oldest countertrade arrangement. A major benefit of countertrade is that it facilitates the conservation of foreign currency.
Why do countries engage in countertrade?
Companies engage in countertrade for three main reasons: (1) to satisfy a foreign-government mandate, (2) to hedge against price and currency fluctuations, and (3) to repatriate profits from countries that limit the amount of currency that can be taken out of the country.
What is a characteristic of countertrade?
Basically counter-trade is an umbrella term for a whole range of commercial mechanisms for reciprocal trade. The common characteristic of counter- trade arrangements is that export sales to a particular market are made conditional upon undertakings to accept imports from that market.
How do you explain the use of countertrade?
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.
What does countertrade involve?
Definition of Countertrade Countertrade is a system of international trading that helps governments reduce imbalances in trade between them and other countries. It involves the direct or indirect exchange of goods for other goods instead of currency.
What is the importance of trade?
Trade is very important to the World and History. trade is important because it was the spread of many items, ideas, and religion. The www could serve as the silk trade route because many information is spread and many things are traded also bought and sold.