CounterTrade Paper
Countertrade is a trade between two countries by which goods are exchanged for other goods rather than for hard currency. Countertrade is often the solution for exporters that may not be able to be paid in his or her home currency and according to the text few exporters would desire payment in a currency that is not convertible.
"Sometimes both parties are happy with the goods they receive, other times one country will liquidate the received asset, ultimately receiving cash in the deal. This is also referred to as "using barter to complete a trade." (www.investopedia.com, 2004)
An example of countertrade is, the former Soviet Union would often countertrade, agreeing to trade, say, Soviet oil for another country's vehicles.
After researching this subject, I have learned that countertrade is an umbrella term covering a wide range of commercial mechanisms for reciprocal trade. Reciprocal trading (two-sided trading, trade in return) occurs when the trade customers is also a supplier. The reciprocal trading arrangements may or may not be formally linked. In practice, reciprocal trade may strengthen an existing trading relationship, and may even create mutual dependencies, which may create new trade relationship.
Barter is probably the oldest and best known example of countertrading, however others, such as offset, buyback, tolling and switch trading, have also evolved to meet the requirements of a more sophisticated world economy. All of these generally involve the exchange of goods or services to finance purchases, rather than using cash alone.
"The importance of countertrade as a trading tool has increased since early 1970s -especially in markets where there is a shortage of foreign exchange and countertrade may be the only effective marketing mechanism for doing business." (www.barternews.com, 2003)
"One of the unique risks of countertrade transactions is that companies often find themselves handling products with which they are not familiar. This is probably the greatest risk in a countertrade transaction." ((www.barternews.com, 2003)
Approximately 130 out of 192 countries in the world require countertrade, one form or another, in their procurements. Many of them did so after having undertaken intensive and serious studies. Many global companies have dedicated in-house specialists dealing specifically with countertrade. Some 20% to 30% of world trade is countertrade. The annual global market size for countertrade is estimated to be between US$200 to US$500 billion. No one really knows what are the correct percentages are and how large the true market size is.
Trade is the most common form of transferring ownership of a product. The concepts are very simple, I give you something (a good or service) and you give me something (a good or service) in return, everyone is happy. However, trade is not limited to two individuals. There are trades that happen outside national borders and we refer to that as international trading. Before a country does international trading, they do research to understand the opportunity costs and marginal costs of their production versus another countries production. Doing this we can increase profit, decrease costs and improve overall trade efficiency. Currently, there are negotiations going on between 11 countries about making a trade agreement called the Trans-Pacific
Office of Industries, U.S. International Trade Commission.(2009).Export controls: an overview of their use, economic effects, and treatment in the global trading system. Retrieved from United States International Trade Commission http://www.usitc.gov/publications/332/working_papers/ID-23.pdf
Exchange: trading goods between two people, were both benefits. However, thought the narrator had not seen and exchange he did however heard about one of Professor Chagnon’s experiences with someone wanting to trade his knife with him.
In 1776, even as Adam Smith was championing the ideals of a free market economy, he recognized that the interests of national security far outweighed the principles of free trade. More then two centuries later, that sentiment proves to still be accurate and in use. Since the early 1900s, the United States has used this precept to defend its position on trade barriers to hostile nations, and through the majority of the century, that predominantly referred to the Soviet Union and its allies.
Academic Consortium on International Trade (2000) Letter to Presidents of Universities and Colleges. Available at: http://www.spp.umich.edu/rsie/acit/ [Accessed 1 April 2014]
Round trip or wash trades are simultaneous, pre-arranged buy-sell trades of energy with the same counter-party, at the same price and volume, and over the same term, resulting in neither profit nor loss to either transacting party. No money is made or lost, but the deals can create the appearance of higher trading volumes and revenues.
Some quantities of the company’s products find their way to unapproved outlets or distribution channels. This gray market for Callaway’s products can undermine authorized retailers and foreign wholesale distributors who promote and support the company’s products and can negatively impact its image in the minds of its customers. On the other hand, stopping such sales could result in a potential decrease in sales to those customers who are selling Callaway products to unauthorized distributors and/or an increase in sales returns over historical levels.
The textbook definition of “literacy”, is the ability to read and write. However, in my opinion, the true definition of the word depends on what literacy means to an individual. In today's society, being literate is almost always required to get any type of decent job. Literacy is definitely the first step of many to be successful in today's society. However, that is not the only means of importance that literacy holds. The fact that literacy has different definitions ties into the fact that literacy has had different effects on certain people throughout their lives. Most people in today's society seem to take literacy for granted because they view it as a hassle or obligation. I do not view literacy as that because of how it has helped me get through the toughest times in my life. In reality, you should love to read no matter what genre it is, and you should write until your hands go numb. Throughout my life, literacy has been a backbone of sorts throughout the struggles I've been through. By using literacy as a form of support, it has allowed me to grow a strong connection to reading and writing and truly appreciate it. To me, literacy means hope. Literacy has helped me heal and has helped me connect with people from all over the country who have changed my life forever.
“Man is an animal that makes bargains: no other animal does this - no dog exchanges bones with another.” ~ Adam Smith. Humans are the only living organisms that trade to obtain another resources. Two basic types of way we consume trade are through market economy and planned economy such as Capitalism and Communism. In the book called the The Wealth of Nations, by Adam Smith, he explain the capitalistic ideology and in the book called Communist Manifesto by Karl Marx he shares his philosophy of communism. Capitalism and communism are on the opposite ends of the economic spectrum because both have different principles, affect the people differently, and have contrastingly result on the ethos.
• Adversaries of unhindered trade battle that the financial profits of exchange are surpassed by the secured overheads. Case in point, energized trade has a tendency to broadcast the trim of clearing business tries, for instance, multinational acquaintanceships that aggregate benefit at the danger of close-by, extra lower winds.
Interdependence: The possibility that unhindered commerce trade prompts interconnections that make clash too much over the top.
Staake, T., Thiesse, F. and Fleisch, E. (2009), ‘The Emergence Of Counterfeit Trade: a Literature Review’, European Journal of Marketing, 43(3/4): pp. 320-349.
There are some theoreticians who view literacy in a form of social practice. In their view, social issues are also important components, as well as linguistic competence and understanding cognitive processes in language studies. Freire (1974) views literacy not only as a process of knowledge transformation, but also as a relationship of learners to the world. Vygotsky (1978) suggests two stages of development at social and individual level. In his view, literacy is a phenomenon that is created, shared, and changed by the members of a society. Gee (1996) similarly argues that becoming literate means apprenticeship with texts and apprenticeships in particular ways of being. In summary, literacy practices are not just about language, but about their interrelation with social practices.
In the beginning of the human kind, there was no money. The only way to get what you want is to trade what you have for it. This system is called bartering. Sometimes, you will find a person who is willing to exchange your goods. However, most of the time, it is really difficult to find the person who is willing to trade with you. Since, you desperately need to exchange, you will need to travel the whole day until you meet the right person. In this type of situation, it will take a lot of time to find the person who wants to trade with your goods. Economists defined this kind of issue as transaction costs. It is the time and effort people spend before they can exchange their goods. In barter economy, the transaction costs are incredibly high. Another major drawback of barter system is that people cannot measure the value of goods. This usually leads to conflicts since people have to make unequal exchanges. In order to reduce transaction costs and conflicts, people developed commodity money.
The opposite side to trade creation is trade diversion. Trade diversion occurs when higher cost suppliers within the free trade area replace lower cost external suppliers. Member countries may trade more with each other than with non-member nations. This may increase trade with a less efficient or more expensive producer because it is in a member country. Weaker companies can be protected inadvertently with the bloc agreement acting as a trade barrier. In essence, regional agreements have formed new trade barriers with countries outside of the trading bloc. In a simple word, trade diversion is diverted from a non-member country to a member country despite the inefficiency in cost. For example, a country has to stop trading with a low cost manufacture in a non-member country and trade with a manufacturer in a member country which has a higher