Countertrade: Can We Afford to Ignore the Impact on the World Market?

In recent years the issue of countertrade has received more and more attention. In this examination of countertrade it is the aim to create first, an understanding of what countertrade is and how the particular forms are used. The reader will understand that essentially there are five forms I of countertrade, barter; counterpurchase; compensation; t offset; and switch. Upon this comprehension an analysis of the buyer and seller's perspective is discussed. When a firm or country contemplates the use of countertrade it is necessary to understand which form of countertrade to use and how other parties will view the form of countertrade you choose. An integration of this literature with countertrade across the globe becomes vital to clarifying the importance of this subject matter. In order for the United States government to understand the necessity of countertrade it is important to exemplify the many uses of this form of international trade. After reading this analysis of countertrade one will see that countertrade supports economies of developed as well as undeveloped countries. Estimates place countertrade at 20-25% of world trade, and some reports suggest that it can be as high as 45%.