1. Countertrade has become a widely accepted methodology for facilitating multinational transactions. Do you agree or disagree? Is traditional "cash for goods" becoming a thing of the past? Please support your answer with some examples and literature support.
Reference: International marketing by Cateora Graham , Mcgraw
Counter trade has become an acceptable form of foreign trade. In fact it is increasing very quickly, and even though no companies will admit it, it is likely to become the most prominent form of foreign trade very soon. There are several examples of counter trade, some of these found in literature are given below.
EXAMPLES OF COUNTERTRADE:
This material is taken direct from the website: http://www.barternews.com" First, direct offsets: McDonnell Douglas sold MD 82 mid-size passenger aircraft to China. The contract included provisions for the Chinese to manufacture aircraft components such as doors to be used for landing gears, passengers, and cargo.
The second form of offsets is indirect offset. These are goods that are not used in the products sold to that country. A good example: the price of DC-9s sold to Yugoslavia was indirectly offset by the purchases of Elan skis.
This form normally occurs between Eastern European countries and the LDC's (less developed countries). The LDC ships products to one East European nation, creating an accounts payable entry on that country's trade books (country A owes US$ for this product).
Country A can then satisfy the entry with either its own products or it can be satisfied by another country that comes along and buys country A's debt. For example, we may sell product to Brazil and receive payment from one of Brazil's trading partners. Sometimes it is part cash and part products from that country
This is where a company agrees to build a plant or to sell technology into a country. The company then gets compensated for technology or capital with exported products produced by that plant. ...
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