Page 5 - Countertrade

However,

countertrade is
as old as trade
itself but in the
modern period it
is closely
associated with

the Soviet Union
and the
communist
states of
Eastern Europe

in the period
after the end of

the Second
World War, whose currencies were generally non-convertible, to
purchase imports. In the 1980s, reflecting the shortage of foreign
exchange, developing nations also resorted to countertrade and today
the successor nations of the former Soviet Union and East European

Communist nations continue to purchase their imports by countertrade.

After the Asian financial crisis of 1997 which made access to export
credits difficult there was a notable rise in the volume of world
countertrade as Asian nations sought to replace hard currency with
countertrade. Where in 1975 countertrade represented 2 percent of
world trade today it is estimated to represent in excess of 30 percent.

Governments of developing nations sometimes insist on a certain
amount of countertrade when dealing with foreign firms for example, the
Thai Government insists that foreign companies who are contracted by
the Thai state agencies for work costing more than 500 million baht
($12.3 million) are required to accept at least 30 percent of their
payment in Thai agricultural products.