Countertrade

Abstract

Countertrading for many countries acts as a viable alternative when overseas purchasing requirements stretch foreign currency too far, though it is also used as a means of employment protection. The principle can be further divided into the process of barter, switch trading, buy‐back, evidence accounts and counterpurchase, the latter being the most widely utilised form. The communist bloc utilises forms of countertrade for both political and economic reasons relating to its ideologically superior status and shortage of convertible currency, but the practice is also found to a limited degree in Western Europe, the Mediterranean and Near East, Asia, Africa, Latin America, the Caribbean and New Zealand. Countertrade is not for the amateur: it is vital to know all aspects of the deal, including exactly what goods are involved, how and when to be supplied, quality and quantity control procedures, what come‐back is available if goods do not meet standards previously agreed, prices, and market restrictions.

Citation

Dewdney, K.A. (1985), "Countertrade", Industrial Management & Data Systems, Vol. 85 No. 1/2, pp. 15-16. https://doi.org/10.1108/eb057389