Countertrade is a general term that may convey several different meanings, all dealing with trade. The basic concept of countertrade is that the seller of the product receives something other than cash as a form of payment. In a traditional business transaction the seller would receive payment in a hard currency such as the U.S. dollar, on the other hand, in countertrade they will receive some good or service that has a monetary value that may be useful to them. There are six main types of countertrade: barter, couterpurchase, offset, switch trading, compensation or buyback, and clearing account arrangements. Barter is the simplest trading of one good for another, just like the caveman used to do it. Counterpurchase is when a buyer agrees to buy a good or service from a seller in exchange for that seller buying something from them. Both parties involved mutually benefit from the transaction and the goods being sold share a similar monetary value. Offset is used when the buyers’ local country requires that parts of a product be obtained in the local country. Switch trading is a more convoluted form of simple barter, where multiple buyers and sellers are involved from various countries. Compensation allows for sellers of large equipment, emerging technology, or even entire organizations to conduct trade by insuring that a certain portion of production be purchased. Clearing account arrangements work to minimize time devoted to large and expensive projects, by making sure that at the end of the term the remaining balance may only be removed by the purchase of additional merchandise by the buyer or a cash payment. Overall countertrade allows for businesses to trade necessary inputs of their company by giving them options on how to make the payment, because they may not always have the available capital in their cash account at all times. Bibliography Neumeier, S. "Why Countertrade is Getting Hot." Fortune 12506 29 1992 Web.15 May 2009.<http://search.ebscohost.com.libproxy.fullerton.edu/login.aspx?direct=true&db=aph&AN=9206220375&loginpage=Login.asp&site=ehost-live&scope=site>. Shim, Jae. "Countertrade."Encyclopedic Dictionary of International Finance and Banking. 2001. Print.