Barter is one of the oldest forms of trade between representatives of various tribes, and then state entities. This type of trade is the equivalent in-kind exchange of goods without currency settlements. A barter transaction, unlike other forms of countertrade, does not imply a cash surcharge for a transaction.
Countertrade also includes counter purchases, tolling (operations with
tolling raw materials), compensation transactions and the purchase of obsolete equipment. Unlike other forms, barter is a valued, but completely currency-free
exchange of goods. The equivalence of such transactions is determined on the basis of world prices that have developed in the industry in question at this time.
A barter agreement is actually a double sale and purchase agreement with identical conditions regarding penalties, insurance conditions, force majeure circumstances, etc. Already in the preamble of the contract, its difference from the usual commercial contract is noticeable, because the parties cannot be defined as “Buyer” and “Seller”, and are more often referred to as “Buyer 1” and “Buyer 2” or “Party 1” and “Party 2”. Claims for the fulfillment of the contract are also satisfied exclusively by additional deliveries of a particular product. Thus, if one of the suppliers is late with the shipment of its products, then, in accordance with the contract, it will have to compensate the losses of the other party in the goods equivalent. Since products on the world market differ in utility, scarcity and cost, this ratio should initially be carefully calculated and spelled out in the contract.
Barter is a type of trade, the prevalence of which in modern conditions is due to the following reasons:
1) the absence of the necessary currency resources for the transaction from one of the parties;
2) limited nomenclature and assortment of goods on the market.
Barter allows you to solve these problems of the company and allows it to enter the international market, which in general has a positive effect on its profitability. However, a number of difficulties are associated with the use of barter, which negatively affect the economic situation in the country. In this regard, according to the WTO charter, barter transactions that do not involve additional financial settlements between the seller and the buyer are prohibited.
Barter is a form of trading, the use of which leads to problems. They include understatement of the
customs value of goods, which leads to difficulties in their customs accounting when crossing the sovereign border of a state. This leads to a distortion of
foreign trade statistics
, which means that it contradicts the concept of open trade and prevents the liberalization of trade relations. But other forms of countertrade are fully recommended for use under the WTO charter. For example, without the purchase of obsolete products in modern competitive conditions, automobile corporations simply would not have survived. In addition, the modern consumer, especially in the West, is increasingly striving to show his concern for the environment, and firms are trying to benefit from this.