In all its forms, counter-commerce provides countries with limited access to liquidity to exchange goods and services with other countries. Counter-trade is part of a comprehensive import and export strategy that ensures that a country with limited national resources has access to the necessary goods and raw materials. In addition, it offers the exporting nation the opportunity to offer goods and services in a larger international market, thereby fostering the growth of its industries. One of the great advantages of counter-trade is that it facilitates the maintenance of foreign currency, which is a priority consideration for creditworthy countries and is an alternative to traditional financing, which may not be available in developing countries. Other benefits include lower unemployment, increased sales, improved capacity utilization and easy access to demanding markets. Counter-trade is a reciprocal form of international trade that involves exchanging goods or services for other goods or services rather than hard currencies. This type of international trade is more common in developing countries where foreign exchange or credit facilities are limited. Counter-trade can be divided into three main categories: barter, counter-purchase and offset. Barter is the oldest counter-trade arrangement. It is the direct exchange of goods and services of equivalent value, but without cash compensation.
The exchange transaction is called “trade.” For example, a bag of nuts can be exchanged for coffee beans or meat. A major drawback of counter-trade is that the promise of value may be uncertain, especially in cases where traded products have significant price volatility. Other drawbacks of counter-trade are complex negotiations, potentially higher costs and logistical problems. There are other reasons for the growth of counter-trade: under a counterparty agreement, the exporter sells goods or services to an importer and agrees to purchase other products from the importer within a specified time frame. Unlike bartering, exporters who enter into a counterparty agreement must use a trading company to sell the goods they buy and not use the goods themselves. In an ideal consideration, a company receives products that it can use internally or pass on to established customers. Companies considering imposing commercial obligations should establish lists of products and services that can be easily used or eliminated. Large chemical groups such as Dow Chemical Co. or companies that buy a lot from abroad, such as Union Carbide Corp., are particularly well placed to process traded goods. Even the complexity of counter-commerce makes it a less privileged way of doing business.