Counter trade

The compensation trade (counter trade) is a form of international trade in which offer the companies selling the buyers from different regions of the world individual payment options and modalities to prevent example, fluctuations in exchange rates, commodity prices or a poor payment record etc.. A different goal may be making profits or benefits. The compensation trade wins in the countries in importance, where an extensive direct investment, for example, for political reasons is not possible. In general, economically weak countries are affected.

The compensation trade accounts for approximately 15-25 percent of world trade, and occurs in the following four forms:

  • Direct barter ( barter ) Example: A German company is building a steel plant in Indonesia, which is paid with Indonesian oil.
  • Barter transaction Example: A British aircraft manufacturer sold aircraft to Brazil to 70% in cash and 30% in the form of coffee.
  • Repurchase agreement Example: An American company is building a chemical plant for an Indian company against partial payment in cash and the balance in chemical products that are manufactured at this plant.
  • Counter purchase Example: An American shower manufacturer sells its cola syrup to Russia for rubles and buys for a certain amount of vodka for sale in the United States.
  • Foreign Trade
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