Uses and Limitations of Countertrade

T-NSIAD-87-39: Published: Jul 1, 1987. Publicly Released: Jul 1, 1987.

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GAO discussed the different aspects of countertrade in the world trading system. GAO found that: (1) countertrade and other trading practices are viewed as marketing tools to help gain sales; (2) the United States generally views countertrade as contrary to open and free trading, but does not oppose U.S. business participation in countertrade unless the action could have a negative impact on national security; (3) although the current pilot barter program will barter surplus commodities for strategic and other materials for the national stockpile, initiating discussions with foreign governments for bartering agreements is difficult because of interdepartmental disagreements over reimbursement and accounting procedures; (4) although countertrade can balance exports with imports, countries do not gain because they forego foreign exchange earnings; and (5) while countertrade does not appear to offer many benefits for developed countries, it is usually better to make an export sale through countertrade than not to export at all.

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