Standard Article

Countertrade

Part 6. International Marketing

  1. Aspy P. Palia

Published Online: 15 DEC 2010

DOI: 10.1002/9781444316568.wiem06036

Wiley International Encyclopedia of Marketing

Wiley International Encyclopedia of Marketing

How to Cite

Palia, A. P. 2010. Countertrade. Wiley International Encyclopedia of Marketing. 6.

Author Information

  1. University of Hawaii at Manoa, Honolulu, HI, USA

Publication History

  1. Published Online: 15 DEC 2010

Abstract

Countertrade involves the linked trade obligations of two or more enterprises in two or more countries as stipulated in their import and export commitments. Exporters are often required to accept commodities/services in payment for the goods they sell overseas. If they accept these terms and conclude a countertrade agreement, they acquire a large inventory of countertraded commodities. Otherwise, they forego additional sales, market share, and entry into growing markets. Trading houses, multinational corporations (MNCs), and other countertrade specialists help dispose the surplus countertraded commodities. They specialize by services rendered, by product category, and by geographic region served. The countertrade literature refers to a variety of transactions, which include barter, buybacks, clearing agreements, compensation, counterpurchase, evidence accounts, offsets, parallel trading, and switching. This article covers five basic forms of countertrade: counterpurchase, compensation, offsets, barter, and switch, recognized by the US International Trade Commission. International marketing managers need to be familiar with the patterns of countertrade practiced and the variety of trade, trade finance, consulting, international banking, marketing research, information, and other services provided by countertrade service organizations for specific products in specific markets. This knowledge will enable them to identify and take advantage of emerging opportunities in overseas markets.

Keywords:

  • countertrade;
  • barter;
  • clearing agreements;
  • compensation;
  • counterpurchase;
  • offset;
  • switch;
  • international trade