chapter  2
34 Pages

Countertrade and Offsets: An Overview of The Theory and Evidence

Offsets - where the vendor agrees to undertake some reciprocal transaction over and above that associated with a purely cash transaction - are not confined to military sales. However, where the purchase of civil goods gives rise to this reciprocity, this phenomenon is typically known as countertrade. Moreover, just as there are various forms of offset associated with defence purchases, there are various types of countertrade connected with the procurement of civil goods and services. Although the focus of this book is on offsets, the reader should be aware of the parallel and at times overlapping literature on countertrade not least because research in one area can inform developments in the other.