| CERES No. 99 - May-June 1984 | Three kinds of counter-trade.
Broadly speaking, there are three kinds of counter-trade. The
first, or classical. is the nearest to traditional barter. It
consists of a single transaction in which two parties. either
companies or governments, agree to exchange goods of equal
value. The best known example is the "milk for bauxite"
agreement negotiated in 1982 by the United States and Jamaica.
These agreements are rather rare largely because, despite their
appeal in certain situations, it is difficult to find
appropriate partners whose needs correspond exactly. The second
kind is the "counter purchase arrangement". It is more common
but also more complex. The exporter, generally an exporter of
manufactured goods or services, agrees that a certain percentage
of the payments will be made in the form of goods produced by
the importer. In 1982 nearly 25 per cent of the automobiles
exported to developing countries by the French company Renault
were sent under agreements of this kind.