'Industrial Offsets' - a special form of countertrade

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GRIN Verlag, Nov 5, 2007 - Business & Economics - 16 pages
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Seminar paper from the year 2007 in the subject Business economics - Investment and Finance, grade: 2,00, Vienna University of Economics and Business , course: BWL des Aussenhandels - Grundkurs II, 18 entries in the bibliography, language: English, abstract: In a growing globalized world where cash flows and flows of funds are getting more complex one would expect businesses to be completed in seconds through electronic transactions, which most times is also the case. Nevertheless, the oldest form of trading and its numerous variations regain each day their importance in international trade. Countertrade has become an important element of the world economy, for all countries whether industrialized, emerging or developing since World War 2. Despite the importance the topic continues to gather, there is still no universally accepted definition of countertrade, neither on terminology, set procedures, documentation or volume of trade. Some say it amounts to as little as 5 percent of the world trade whereas others claim it represents as much as 35 percent and growing. The reason for this uncertainty is mainly due to the secrecy of MNCs and countries concerning this topic and to the lack of official statistics and specific national rules. Nevertheless, all authors agree about the importance of countertrade within the world trading system, with its share of the world market is steadily increasing and it becoming one important opportunity for doing international trade. The aim of this paper is to first to lay down the most common variations and definitions of this type of trade and then to focus on a specific form – industrial offsets. In the end the specific field of application, the concerned specific industries and examples will be discussed.

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