An associate from a firm in Russia has approached your firm and desires to purchase some of your products. Your firm is naturally concerned with exchange issues involving the ruble (the Russian currency). The Russian firm has proposed conducting countertrading. What is countertrading? What are some of the advantages and disadvantages of countertrading?
What will be an ideal response?
Countertrading involves bartering agreements, which is the exchange of goods rather than goods for currency. Probably the greatest advantage of countertrading is the opportunity it presents for market expansion. Drawbacks include: it is difficult to determine the true value of goods offered in a countertrade agreement, and it is often difficult to dispose of bartered goods after they’re accepted.
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