World Countertrade Association

Countertrade – the Global Imperative for International Trade

The centuries-old tradition of barter trade has taken on a new life today with corporations and nations conducting it considerably under various new names – countertrade, reciprocal trade and compensatory trade with various sub - categories referred to as counterpurchase or parallel barter, buyback, clearing agreement, switch-trading, offset and debt swaps.

The prevailing ‘cash-only’ denominated international trade payment settlements system, balance of payments disequilibria, shortage of hard cash and currency risk have been the prime causes for the increasing interest in reciprocal trade in many countries. Its growth has been intensified with the arrival of cutting- edge computers technologies, digital currencies and cryptocurrencies. All denunciations with regards to barter trade like the “coincidence of wants” prerequisite and non- fungibility of bartered goods have been ‘blown to bits”.

Pricing Flexibility
One key advantage of reciprocal trade is its pricing flexibility in its export price and the most critical of it all is its capability for the adoption of a mutually agreed upon foreign exchange rate for every transaction - which may differ very much from the market rate. This feature alone can nurture an exceptional business-building synergy among international traders.