How do you explain the continued existence of countertrade? Under what scenarios might its use increase still further by the year 2020? Under what scenarios might its use decline?
In a countertrade, one person or group trades their items of value for the other person’s items, and it fulfills all requirements of the trade. No actual currency is needed or used, other than the goods exchanged. .the condition which can lead to countertrade are currency crises and monetary instability. When forex market is limited, of traders do not have fund to purchase their goods, this situation can lead to countertrade. As long as countries lack hard currencies and foreign exchange reserves, but they trade, countertrade is inevitable. If countries work on trade barriers that decrease world trade, or if the monetary systems of countries strengthen significantly, then countertrade may decrease.
Answer 2: Countertrade can be defined as transaction of goods instead of currency. This transaction usually happens when a company or a firm wants to expand into an international market. It benefits companies a lot like gaining a competitive edge and many other benefits. There are a lot of benefits from countertrade but in my opinion I think it’s going to decrease by 2020. There are many risks to countertrade and it’s an old way of doing business. I think when it comes to exporting countertrade is very risky and can cost someone a lot due to the lack of knowledge in the international market.