 |
Select Language
Hello 你好 Hola Bok Ahoj Hej Hallo Tere Hei Bonjour Ola Guten Tag Γειά σας שלום नमस्ते Halo Dia duit Ciao
こんにちは 안녕하세요 Sveiki Здраво سلام Witam Olá Alo Привет สวัสดี Merhaba Привіт ہیلو Xin chào העלא Përshëndetje Բարեւ Ձեզ Salam Прывітанне Здравейте هتاف للترحيب Contact Us Home |
|
Home > How We Do It > Switch Trading
Switch Trading Countertrade means exchanging goods or services which are paid for, in whole or part, with other goods or services, rather than with money. A monetary valuation can however be used in counter trade for accounting purposes. In dealings between sovereign states, the term bilateral trade is used. OR "Any transaction involving exchange of goods or service for something of equal value." Switch trading involves at least three parties. |
|
|
A switch trade is used when the products received in a barter countertrade transaction are of no use to the exporter or cannot be converted to cash. The original exporter may then barter the goods received for other products which may be sold for cash. This chain of transactions may be repeated a number of times. As a result, this expands the number of goods that may be bought and sold. Switch trading is useful to a country with unique requirements or goods and can open untapped markets. For example, before the reunion of Germany, a Brazilian firm exported corn to East Germany and received various products in return; the German products were then sold for hard currency. The advantages in switch trading are that it enables the parities to achieve a satisfactory outcome and expands export markets.More than 80 countries nowadays regularly use or require countertrade exchanges. |
|
Officials of the General Agreement on Tariffs and Trade (GATT) organization claimed that countertrade accounts for around 5% of the world trade. The British Department of Trade and Industry has suggested 15%, while some scholars believe it to be closer to 30%, with east-west trade having been as high as 50% in some trading sectors of Eastern European and Third World Countries for some years. A consensus of expert opinions (Okaroafo, 1989) has put the percentage of the value of world trade volumes linked to countertrade transactions at between 20% to 25%.