ABSTRACT
Countertrade (CT) is clumsy and introduces financial uncertainties which are absent in multilateral trade. It also engenders additional operational costs; they are particularly onerous in small-sized transactions. Most CT arrangements are settled on an ad hoc basis. Originally CT demands were limited to 20–30 per cent of the value of the export transaction. The actual implementation of the CT provisions varies widely. It can be in the hands of the national government, provincial authorities, the exporting and importing companies or specialist trading houses. The Commonwealth of Australia exacts offset purchases from foreign firms which supply the public sector – 30 per cent is a frequently cited percentage. The Australian states, however, impose CT requirements which can only be fulfilled through purchases from producers within their territorial jurisdiction. Aggrieved Organisation for Economic Co-operation and Development exporters have found that in federal Yugoslavia CT is often constricted by geographical considerations.
