2. COUNTERTRADE
What is it ? means to exchange goods or
services paid for in whole or in part,
with other goods or services instead of money
This 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.
3. HISTORY
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.
4. BASIC OBJECTIVES OF
COUNTERTRADE
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.
5. FORMS
COUNTERTRADE
BARTER
Clearinghouse
Offset Arrangement
countertrade
Counter Switch
Purchase Trade
Buy Back
6. COUNTERTRADE
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.
7. BARTER
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.
8. CLEARINGHOUSE
ARRANGEMENT
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.
9. SWITCH TRADE
Practice in which a company sells to another its
obligation to make a purchase in a given
country.
10. BUY BACK
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.
11. COUNTER PURCHASE
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.
12. OFFSET
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.
13. DISADVANTAGES
*It ineficiente. Slow and complex
negotiations
* Some argue that such transactions alter
fundamental operations of the free
market, and therefore the resources will be used
inefficiently.
* Increasing costs.
* Transactions that do not make use of the money
represent a major step backwards in terms
economic development.
* Brokerage costs.
* Creates uncertainty.
14. ADVANTAGE
* 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.
15. GENERALIZATIONS OF
COUNTERTRADE
* 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.
16. Does the
exporter
BuyBack received
Counter back
Purchase goods?
Counter
purchase yes
Buyback
no yes
Agreement
yes Offset
reciprocal
Counter
Purchase Buyback
limited to
the
purchase
requires real? no
use of Offset
money
Clearing
yes yes Switch
other
no Does it
extend to
stakeholders Trading
involved?
a long period
and involves
a
basket of
no
barter goods Clearing
no Barter
