WHAT IT IS? Countertrading refers to a category of international trade in which an exporter agrees to accept payment in the form of goods or services. One such method of trading between nations is called counter trade. Counter trade is an import / export relationship between nations or large companies in which good and/or services are exchanged for goods and services instead of money.
HOW IS IT USED? Countertrade also occurs when countries lack sufficient hard currency, or when other types of market trade are impossible.
INVOLVED PARTIES Both would need to have what the other wants. OR two countries that enter into cooperation contract agree to continuous purchases of goods and services from each other.
TYPES OF THE MODE Barter Switch Trading Counter Pourchase Buyback Offset
ADVANTAGES Gives additional hard currency. Technology advances that the country would not otherwise have. It helps conserve foreign currency reserves of the importing country It allows the importing country to export products for which markets might not otherwise exist.
DISADVANTAGES The main disadvantage of countertrade is that companies have the possibility of handling goods that they are not familiar with.
REFERENCES Countertrade. (2013,March 17). In Wikipedia, The Free Encyclopedia. Retrieved 10:59, February 27, 2013, from http://en.wikipedia.org/wiki/Counter_trade Barter. (2013, March 17). In Wikipedia, The Free Encyclopedia. Retrieved 23:25, March 16, 2013 fromhttp://en.wikipedia.org/wiki/Barter [Web log message]. (2010, 03 11). Retrieved from http://www.barternewsweekly.com/2010/03/11/what-is-counter-trade-1851 American Countertrade Association. "Welcome to the ACA Web Site." Washington: American Countertrade Association, 1999. Available from www.countertrade.org . Bost, Patricia J., and John A. Yeakel. "Are We Ignoring Countertrade?" Management Accounting, December 1992, 43-47. http://www.referenceforbusiness.com/encyclopedia/Cos- Des/Countertrading.html#ixzz2O1OWqmG3 Counter trade. (N.A) (2011, 02 11). Retrieved from http://www.slideshare.net/abhijeetkadian/counter- trade Counter trade. (N.A) (2013). Retrieved from http://www.investopedia.com/terms/c/countertrade.asp http://www.investopedia.com/terms/c/countertrade.asp