Counter Trading and its effect on global financing

This essay reflects Counter Trading and its effects on marketing tactics and techniques: this includes bartering, switch trading, counter purchase, buyback and offset, and how Counter Trading affects the market today. In 1972, counter-trading was estimated to be used in businesses and governments in 57 countries, then in 1979 that number increasingly became 27 countries; finally in the 1990’s, 100 countries were using counter-trading in businesses and governments across the world.

Today, business and economist experts estimate more than 80 countries make up 5% of the required counter-trading techniques used in businesses across the world according to an organization called GATT. Source 2: http://en. wikipedia. org/wiki/GATT The British Department of Trade and Industry has suggested 15% and other numerous scholars believe the rate is closer to 30% with some east-west trade as high as 50% in trading sectors in Eastern European and Third World Countries. In the United States of America, an official statement was made; saying:

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"The U. S. Government generally views countertrade, including barter as contrary to an open, free trading system and, in the long run, not in the interest of the U. S. business community. However, as a matter of policy the U. S. Government will not oppose U. S. companies' participation in countertrade arrangements unless such action could have a negative impact on national security. " (Office of Management and Budget; "Impact of Offsets in Defense-related Exports," December, 1985). A large part of countertrade has involved military sales.

Source quote 2a: http://en. wikipedia. org/wiki/Counter_trade Counter-trade also occurs when hard currency, the literal meaning is currency in each country, is not used to receive (a) good(s) from another country or service in exchange with someone’s own good(s). In the year of 2000, India and Iraq agreed on an “oil for wheat and rice” barter deal, with approval under article 50 of the UN Gulf War Sanctions, which would facilitate 300,000 barrels of oil delivered to India at a price of $6. 85 a barrel while Iraq oil sales into Asia were valued around $22.

00 a barrel. In 2001, India agreed to swap 1. 5 million tons of Iraqi crude under the oil-for-food program. In counter-trading, there is a fine line between trading goods for another countries or a local companies goods. Counter-trading means you need a specific amount or a variety of these goods to complete a counter-trade, which is used in most of today’s sales and exchanges throughout the world. If you have 2,000 products which are not used or needed and need to trade them for 1,560 of a highly demanded product, a counter-trade is issued.

Sometimes stealing, burglary or untrusting employee’s make it hard to complete a counter-trade if the good(s) are not available; this makes transactions or services drop and decline, which also destroy many businesses. Source 3: http://en. wikipedia. org/wiki/fair_trade_debate Not all companies use counter-trading, but other ways of making money by using switch trading, also known as “fair-trade” in today’s society. Due to the high nature of debate reasoning and history behind fair-trade, I will not go into detail about its history too much and keep it brief.

Fair-trade is setting the price of a product that is already above the market price; this encourages products to make more of the product. To sum this essay, counter-trade is in the realm of economics, meaning it is just another way of gathering money to keep a business alive or keeping goods in-flow with your company. Today, there are many companies and small firms that try to replicate counter-trade and other forms of techniques to raise money; it all falls into economics, but the range of the world in economy extends to so many techniques and attempts to make money.

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