by Chuck Black
It’s worth noting that the fall conference of the Global Offset and Countertrade Association (GOCA) will be held from September 28th – October 1st, 2014 in Cartagena, Colombia.
The organization, originally known as the American Countertrade Association (ACA) has a membership of over 100 international firms (including most of the the largest aerospace companies), who get together once or twice a year to discuss offset policy and counter-trade initiatives.
According to the GOCA website, the definition of “countertrade” is defined as the “use of reciprocal trade tools, such as barter or other export activities to meet hard currency needs, primarily in commercial transactions.”
These tools include offset agreements, but also a variety of other methodologies such as switch trading (where one company, with an obligation to purchase items in a specific country, sells the obligation to another company), counter purchasing (the sale to one company by another, which is tied to a future promise of further purchases), buyback (when a firm builds a plant or supplies technology, equipment, training, or other services in exchange for a certain percentage of the plant’s output as partial payment) and/or other forms of compensation trade agreements.
In the current climate of growing international trade to countries which often require barter and countertrade agreements as part of the cost of doing business, its well worth the time and effort to keep up on the specifics of these sorts of options.