Countertrade :: essays research papers

CounterTrade PaperCounter manage wind is a trade between deuce countries by which goods atomic number 18 exchanged for other goods rather than for hard currency. Countertrade is a great deal the solution for exporters that may not be able to be paying(a) in his or her home currency and according to the text some exporters would desire payment in a currency that is not convertible."sometimes both parties are happy with the goods they receive, other times one domain will liquidate the received asset, ultimately receiving cash in the deal. This is overly referred to as "using barter to complete a trade." (www.investopedia.com, 2004)An example of countertrade is, the creator Soviet Union would a good deal countertrade, agreeing to trade, say, Soviet oil for another countrys vehicles. later researching this subject, I have learned that countertrade is an umbrella term covering a wide range of commercial mechanisms for correlative trade. Reciprocal trading (two-side d trading, trade in return) occurs when the trade customers is also a supplier. The reciprocal trading arrangements may or may not be formally linked. In practice, reciprocal trade may strengthen an existing trading relationship, and may veritable(a) create mutual dependencies, which may create new trade relationship. vocation is probably the oldest and best known example of countertrading, however others, such as offset, buyback, tolling and switch trading, have also evolved to meet the requirements of a more advanced knowledge base economy. All of these generally involve the exchange of goods or operate to finance purchases, rather than using cash alone. "The importance of countertrade as a trading tool has increased since early 1970s -especially in markets where there is a shortage of foreign exchange and countertrade may be the notwithstanding effective marketing mechanism for doing business." (www.barternews.com, 2003)"One of the unique essays of countertrade transactions is that companies often find themselves handling products with which they are not familiar. This is probably the greatest risk in a countertrade transaction." ((www.barternews.com, 2003)Approximately 130 out of 192 countries in the world require countertrade, one form or another, in their procurements. Many of them did so after having undertaken intensive and serious studies. Many global companies have devote in-house specialists dealing specifically with countertrade. Some 20% to 30% of world trade is countertrade. The annual global market size for countertrade is estimated to be between US$200 to US$500 billion. No one really knows what are the correct percentages are and how large the true market size is.