Barter and countertrade: Implications for U.S. trade

Abstract

Scope and Method of Study: This study reveals the attitudes of Bank Export Trading Companies towards countertrade practices. The instrument used to explore the attitudes was a mail survey. The survey was designed, administered and analyzed over a period of three months. Descriptive statistical analysis was used to arrive at the results.

Findings and Conclusions: Analysis indicated that countertrade has grown in popularity over the last ten years. It has shifted its focus from predominantly East-West trade to North-South trade. Although many countertrade arrangements are undertaken for purely commercial considerations, a substantial number are undertaken to fulfill government trade policy requirements. Governments in most countries intercede in international trade flows through trade regulations, administrative devices and other formal and informal activities. These intercessions result in countertrade arrangements which implement such objectives as assuring stable supplies of essential imports, minimizing balance of payment deficits or diversifying the domestic economy.