Exporting, Importing, and Countertrade

Countertrade -

a range of barter-like agreements that facilitate the trade of goods and services for other goods and services when they cannot be traded for money

Counterpurchase

-are reciprocal buying agreement • occurs when a firm agrees to purchase a certain amount of materials back from a country to which a sale is made

Barter -

a direct exchange of goods and/or services between two parties without a cash transaction used primarily for one-time-only deals

Offset-similar to counter purchase

one party agrees to purchase goods and services with a specified percentage of the proceeds from the original sale

Switch trading

the use of a specialized third- party trading house in a countertrade arrangement (selling something to third party --> want to make money off of it)

A buy back occurs

when a firm builds a plant in a country or supplies technology, equipment, training, or other services to the country • agrees to take a certain percentage of the plant's output as a partial payment for the contract