Passage 2
International trade by barter is, in fact, an inefficient and expensive means of doing business compared to trading with money. Observes David Yoffie, “To cover the additional costs it incurs in handling goods it is forced to take in cou
Passage 2
International trade by barter is, in fact, an inefficient and expensive means of doing business compared to trading with money. Observes David Yoffie, “To cover the additional costs it incurs in handling goods it is forced to take in countertrade, a multinational company simply boosts the price of the goods it sells.” Yoffie sees countertrade as a form of protectionism. “It can help one group and hurt another,” he says.
On the other hand, Daniel Cecchin, director of Countertrade Services for Bank America World Trade Corp., asserts that the rise of countertrade provides practical solutions to the debt problems of the international monetary system.
40.In what sense is countertrade seen as a form of protectionism?
Countertrade involves conditional buying or allows no free choice in importing. That's both against competition and free trade.
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