Countertrade, a complex and controversial form of...

Countertrade, a complex and controversial form of barter-like trade, often “allows California firms to enter markets which would otherwise be closed to them,” according to a new study released by the California World Trade Commission and the Monterey Institute of International Studies.

“We don’t advocate countertrade,” explained Robert Churney, project manager for the study. “We just explain that in countries requiring it, the bottom line is that you either acquire the capability or lose the trade to someone else.” Estimates value countertrade transactions at as much as 20%, or $500 billion, of world trade.

The practice is increasing in importance. In 1986, for example, more than 110 nations had some form of countertrade program, compared to fewer than 20 in 1978, the report said. In addition, more than three-fourths of the International Fortune 1,000 had a countertrade department by 1986, compared to only 5% in 1978.