Countertrade
Topic: International Trade Policy, WTO and Intellectual Property · NCERT: Beyond NCERT
Meaning
Countertrade is international trade in which goods are paid for wholly or partly with other goods, instead of fully in money. It is useful when a country lacks hard currency, meaning a freely convertible currency such as the US dollar, or when a country cannot use such currency. It lets trade continue without spending scarce foreign exchange.
Example
Rupee-rouble trade with the USSR in the planning era was a form of countertrade. Goods were swapped for goods, and the trade was settled in non-convertible rupees rather than hard currency.
Don't confuse with
- Barter: a pure one-to-one swap of goods with no money at all. Barter is one form of countertrade, but countertrade also covers deals that are only partly paid in goods.
Related concepts
- Free trade
- Protectionism
- Trade barrier
- Infant industry argument
- Strategic trade policy
- Beggar-thy-neighbour policy
- Trade liberalisation
- Export promotion
- Trade openness