Countertrade still flourishes
When the Soviet Union disintegrated and the market economy system prevailed in central and eastern Europe, many experts thought that countertrade in all its many forms, from sophisticated swaps to downright barter, would go into terminal decline. It did not happen.
The lead story in the current issue of the ICC's Documentary Credits Insight examines the new forms of countertrade that have emerged. Trade specialist Michael Rowe writes: "The practice is responding to changed needs by taking on different forms and moving into new regions and relationships."
Emerging Asian markets, like Indonesia and Thailand, have developed official countertrade policies. Offset deals - the term used when governments impose countertrade conditions on procurement contracts such as defence deals - are now widely practised in western Europe, North America and the Middle East.
Many of the former centrally-planned economies of eastern Europe are exploring variations on barter as a way of overcoming their lack of foreign exchange to pay for imports from the west. Latin Am
erican countries have led the way in debt/equity swaps, which can be considered a form of "financial countertrade."
The current issue of Documentary Credits Insight carries reports on recent developments in the fight against fraud, answers by experts of the ICC Banking Commission to queries on the application of the Uniform Customs and Practice for Documentary Credits, and an introduction to the ICC's new DOCDEX system for settling letter of credit disputes.
|