Barter and other transactions that are executed in whole or in part with other goods and services—collectively known as countertrade—account for 20-30% of international trade which can be hindered by monetary challenges. More than 500,000 global members of the corporate trade exchange and 65% of Fortune 500 companies report they are engaged in some type of countertrade.
This conceptual note defines the six types of countertrade and reviews the motivations for these complicated transactions which include: currency problems, government policy, currency risk and foreign direct investment. The note also provides three examples of countertrade in practice.