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Barter, Counter-trade and
offset refers to a variety of exchange mechanisms whereby goods, commodities, services or
technology are “paid for” through reciprocal purchasing obligations. Firms agree
to accept each other’s products as full or partial payment for the transaction.
Hence, the use of hard currencies and /or short-term bank credits is minimal and
outward (export) flows of international activities, with
each party in the transaction both an importer and an exporter (or a
buyer and a seller) at the same time. It is this interactive and
reciprocal exchange that underlie counter-trade deals, making it a
sophisticated variant to the
theme “I buy from you, you buy from me.”
While the concept and our procedures
of counter-trade may be simple and straightforward, its
implementation is not. This is why firms, particularly small and
medium enterprises are reluctant to engage in counter-trade. Since Barter,
Counter-trade and offset
has become a reality in
international business,
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Introduction
Understanding
Problems
Motivations
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