Why countertrade 强个个 Advantages Disadvantages Avoidance of debt and Does not reduce exchange rate volatility commercial risk Covert reduction of May mask dumping pnces activities Circumvention of price Does not allow for and exchange controls multilatera/ settlements Increasing popularity Trade is restricted to two bilateralism concept parties, each with A method of market entry specitic goods to trade Stability for long-term Is non-competitive and sales can erode the quality Improves quality of and efficiency of transaction production Copyright@ 2001 by Harcourt, Inc. All rights reserved 22-3Copyright © 2001 by Harcourt, Inc. All rights reserved. 22-3 Why Countertrade? Advantages • Avoidance of debt and exchange rate volatility • Covert reduction of prices • Circumvention of price and exchange controls • Increasing popularity of bilateralism concept • A method of market entry • Stability for long-term sales • Improves quality of transaction Disadvantages • Does not reduce commercial risk • May mask dumping activities • Does not allow for multilateral settlements • Trade is restricted to two parties, each with specific goods to trade • Is non-competitive and can erode the quality and efficiency of production