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Countertrade

Countertrade is a reciprocal form of international trade in which goods or services are exchanged for other goods or services rather than for hard currency. This type of international trade is more common in developing countries with limited foreign exchange or credit facilities. Countertrade can be classified into three broad categories: barter, counter purchase, and offset.

Bartering is the oldest form of countertrade. A counter purchase refers to the sale of goods and services to a company in a foreign country by a company that promises to make a future purchase of a specific product from the same company in that country. An offset is a countertrade agreement in which a company offsets a hard currency purchase of an unspecified product from that nation in the future. Countertrade facilitates the conservation of foreign currency so countertrade is seen more frequently in developing countries.

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Reciprocity, classify components, develop a circle

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