Countertrading
From Supply Chain Management Encyclopedia
Russian: Встречная торговля
Introduction
Countertrade is an umbrella term covering a wide range of commercial mechanisms for reciprocal trade. It can manifest itself in several forms but always involves payment being made, at least partially, in goods or services instead of money. It often occurs when multinationals sell to a customer abroad and that customer pays by providing goods to the multinational. In some countries,countertrade is a condition of the buying organisation importing goods from elsewhere [1].
Throughout history countertrading and barter [2] occurred whenever there was a shortage of money, or before money even existed. In modern times, countertrading arose as a means of conducting international trade when money was scarce, currencies couldn't be converted, or they were subject to inflationary and deflationary swings in value. In Germany between the two World Wars and after World War II, money was scarce and countertrading and barter became a way of conducting international trade. Eastern European countries followed Germany's lead and employed countertrading to overcome the problems of their own nonconvertible currencies. It was a practice that was favored by the centrally planned Eastern European economies. In the 1990s Eastern Europe and the countries of the former Soviet Union began countertrading with Western nations to overcome difficulties associated with their currencies.
References
- ↑ Countertrade - CIPS Knowledge Works - http://www.cips.org/Documents/Resources/Knowledge%20Summary/Countertrade.pdf - accessed 05/09/2012
- ↑ Countertrading // Reference for Business: Encyclopedia of Business - http://www.referenceforbusiness.com/encyclopedia/Cos-Des/Countertrading.html#ixzz0uhqG14cn - accessed 05/08/2012
