Critical Thinking and Discussion Question Response

        Countertrade is a technique to selling goods and services against other goods and services when the dealing of money not easily possible in the business. Sometimes, the policies of country is not feasible for the exchange currency and the exporter or importer feels loss .after 1960s this method of purchase become famous and then many developed countries are using this method (Hill, 2011).

        Countertrade is become very popular with the passage of time, especially in those countries whose currency are nonconvertible to purchase any other product from different countries or due to lack or foreign exchange reserves country is unable to pay in form of money or currency. The importance of countertrade starts from 8 to 10% and goes down to 2 %. But before some years there was showing a lack of using this form of trading due to financial crisis. And many countries also face loss due to this lack because their currency having no worth as compare to other country’s currency. But now countertrade is becoming the means of financing at international trade.

        Countertrading having simple roots of trading by exchanging goods and services with other goods and services but with this, it includes many different set of activities that divide the basic countertrade into five major types like barter, counter purchase, offset, switch trading and compensation or buyback. In some cases, more than one type of countertrading also involves in one dealing according to different situations or requirements of trading. With the importance of export and import, countertrade is very much important especially when different trading happen between rich and poor countries and countries want to support poor country with different products or help them in any problematic situation. Many dealings happen in different countries that support each other with their special products and their economy at international going to increase (Kaynak & Seyoum, 2014).

        In a nutshell, the above discussion show that countertrading is very much beneficial for all those countries whose value of currency is not sufficient at international level. They want export or import their products with different countries but due to lack of export reserves they are not able to do such type of trading. For such countries these types of trading are much better. Many years ago, when the value of currency is not acceptable then the barter system also vary popular among different states and countries and with the passage of time this system going to be vanished. But countertrading again shows that system and very much helpful specially for those countries who are poor in the foreign trading system and having no reserves that deals with countries as per their need. So, countertrading having its own importance in case of foreign trading and countries get many benefits from such type of trading through their specific products (Neelankavil, 2015).

          After the detail discussion and conclusion, we can say at our ending side that countertrading is very much important for many countries who having lack of foreign reserves but also want to do some trading at international level. Because this system also brings different products or services of different countries by exchange their own products and people of that country also entertain other country products. This system also helpful in enhancing the trading status of any country that is facing a lower position in trading sector. So, it helps lower level countries to move their living standards at high level without using its poor currency.

 References

Hill. (2011). International Business: Competing in the Global Marketplace. Tata McGraw-Hill Education.

Kaynak, E., & Seyoum, B. (2014). Export-Import Theory, Practices, and Procedures. Routledge.

Neelankavil. (2015). Basics of International Business. M.E. Sharpe.