Sharon works for a cereal manufacturing company. Her company recently built a manufacturing facility in canada and agreed to take 15 percent of the cereal produced as partial payment over a ten-year period. What form of countertrade is her company pursuing?.

Sagot :

Buy-Back exists the form of countertrade her company is pursuing.

What is Countertrade?

Countertrade exists as a kind of reciprocal international trade in which commodities or services exist traded for other goods or services rather than hard cash. This kind of international commerce exists more widespread in underdeveloped nations that include restricted access to foreign cash or financing. Countertrade is separated into four types: barter, buy-back, counter purchase, and offset.

Countertrade, in whatever form, allows countries with limited access to liquid capital to exchange commodities and services with other countries. Countertrade exists as a component of a larger import and export process that assures a country with limited local resources includes access to essential commodities and raw materials. Furthermore, it permits the exporting country to provide goods and services in a more significant worldwide market, fostering growth in its sectors.

A buyback exists as a countertrade happens when a firm builds a manufacturing establishment in a country—or supplies technology, equipment, training, or other services to the country and decides to carry a particular percentage of the plant's output as partial payment for the contract.

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