COUNTERTRADE

DIANA PAMELA RAMÍREZ.

BUSINESS 1.

What is it ? means to exchange goods or services paid for in whole or in part, with other goods or services instead of moneyThis expression is used associated to foreign trade and international trade between countries.Born and developed as a result of the inability or inconvenience of purchasing goods in cash, in the event that there is a shortage of foreign exchange, helping to formalize sales that otherwise would not have been possible.

COUNTERTRADE

Since the beginning of time mankind has used some form of countertrade in order to meet their personal needs and even though the concept has remained the same, many things have changed over the centuries with respect to countertrade.the modern day countertrade agreements began and how countries require many different rules and regulations when it comes to countertrade.

HISTORY

They are:* Increase overall bilateral trade.* Avoid currency transfer.* Promote the development of the countries involved.* Overcome or minimize the effects of the barriers imposed by countries with protectionist economies.* Increasing international trade.* Avoid development of external indebtedness.* Create new job opportunities.

BASIC OBJECTIVES OF COUNTERTRADE

FORMS COUNTERTRADE

countertrade

BARTER

Clearinghouse Arrangement

Switch Trade

Buy Back

Counter Purchase

Offset

Countertrade, as we know it today,

came about in the 1960’s

as a way for the Soviet Union

and the Communist states of Eastern Europe to purchase imports because their currencies were nonconvertible.

The technique became popular during the 1980’s among many developing nations who did not have the means to purchase necessary imports.

COUNTERTRADE

The direct exchange of goods between merchants, goods or services directly for other goods or services without using money as a means of purchase or payment.

BARTER

is a form of barter traders agree buy a certain amount of goods from each other. Establish accounts with each other that are debited and accredited as necessary. At maturity arrangement, participants in money or cancel goods.

CLEARINGHOUSE ARRANGEMENT

Practice in which a company sells to another its obligation to make a purchase in a given country.

SWITCH TRADE

occurs when a company builds a plant in a country - or materials technology, equipment, training, or other services to the country and agrees to take a certain percentage of the production plant as part payment for the contract.

BUY BACK

Sales of goods and services to a company in another country by a company that is committed to making a future purchase of a specific product from the same company in that country.

COUNTER PURCHASE

Agreement by one nation to purchase a product from another, subject to the purchase of some or all components and raw materials from the buyer

of the finished product.

OFFSET

*It ineficiente. Slow and complex negotiations* Some argue that such transactions alterfundamental operations of the freemarket, and therefore the resources will be usedinefficiently.* Increasing costs.* Transactions that do not make use of the moneyrepresent a major step backwards in termseconomic development.* Brokerage costs.* Creates uncertainty.

DISADVANTAGES

* Fighting inflation.

* Relieves deficit payment

* Reduces the volume of external debt

* Facilitates the entry of technology

* Facilitate the development of new markets.

* Stops processes unfair competition from third countries.

* Reduces external marketing costs.

ADVANTAGE

* There are advantages and disadvantages with the countertrade.

*It can benefit both participants and in some circumstances is the only trade

possible.

* Whether transactions

countertrade good or bad for the

global economy, the fact is that they will continue

increase in the near future as

world trade increases.

GENERALIZATIONS OF COUNTERTRADE

requires use of money

yes

Counter purchaseBuybackOffset

no

barter

Agreementreciprocallimited to

the purchase

real?

yes

no

BuyBackCounter Purchase

Offset

Does the exporterreceived

backgoods?

yesnoCounter Purchase Buyback

Does it extend to

a long periodand involves a

basket of goods

yes

no

Clearing

Barter

otherstakeholders

involved?

yes

no

Switch Trading

Clearing

http://en.wikipedia.org/wiki/Counter_tradehttp://bizcovering.com/international-business-and-trade/the-10-things-you-need-to-know-about-types-of-countertrade-an-analysis-of-trading-goods-and-services-without-currency

/ http://

www.primeraexportacion.com.ar/documentos-tecnicos/234-intercambio-compensado-permuta-comercial-contracomercio-countrade.html

http://apuntesingenierialegal.blogspot.com/2009/02/objetivos-basicos-del-el-countertrade.html

http://www.carlospitta.com/Courses/Gestion%20Financiera%20Internacional/Lectures/Sesi%C3%B3n%206%20(Cap%2020

).pdf

BIBLIOGRAPHY