7/25/2019 Countertrade Can Take Many Forms

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Countertrade can take many forms. These are:

Barter- is the direct exchange of one good for another. It requires a

double coincidence of wants. Barter trade can take a number of formats.

im!le barter is the least com!lex and oldest form of bilateral" non #monetarised trade. $ften it is called %straight%" %classical% or %!ure% barter.

& clearinghouse arrangement- is a form of barter in which the traders

agree to buy a certain amount of goods from each other. They set u!

accounts with each other that are debited and credited as needed. &t the

maturity of the arrangement" the !arties settle u! in cash or merchandise.

witch trading - 'ractice in which one com!any sells to another its

obligation to make a !urchase in a gi(en country. witch trade is the!urchase by a third !arty of one country)s clearing agreement balance for

hard currency.

& buy-back transaction in(ol(es a technology transfer (ia the sale of a

manufacturing !lant. The seller of the !lant agrees to buy back some of the

out!ut of the !lant once it is constructed.

& counter !urchase trade agreement ale of goods and ser(ices to a

country by a com!any that !romises to make a future !urchase of as!ecific !roduct from the country.

&n offset transaction &greement that a com!any will offset a hard -

currency !urchase of an uns!ecified !roduct from that nation in the future.

&greement by one nation to buy a !roduct from another" sub*ect to the

!urchase of some or all of the com!onents and raw materials from the

buyer of the finished !roduct" or the assembly of such !roduct in the buyer

nation.