Barter for Exports pg-c-  
Countertrade is a form of barter or linked trading. U,S, companies need countertrade because it is a valuable marketing tool and a financing instrument when traditional financing is not available. The U.S. government needs countertrade, especially in the form of a weapons sales offset policy, because all our major trading partnersÛÓCanada, Europe, JapanÛÓ use it on us.</br></br>Here are some examples of how countertrade can work. Using barter financing, Wes-tinghouse recently sold a $100 million air defense radar system to Jordan. Foreign Military Sales (FMS) financing through the Pentagon was not available, nor were other traditional financing instruments. However, the Jordanians were willing to pay for the system with phosphate, The large Japanese trading company, Mitsubishi, has already sold most of the phosphate, and the safe has proceeded fairly smoothly.</br></br>In another case involving the area of military offsets, General Dynamics was required by Turkey to put together a countertrade package, valued at more than $1 billion, as a cemerpiece or us recent $4.rs ouuon sale ot F-16s to that important NATO country. The package included technology transfer and investment in Tusas, the Turkish aircraft company, along with a commitment to export assorted products out of Turkey. Turkey was hard-pressed for valuable foreign exchange and needed the countertrade package, as well as FMS financing from the Pentagon, to justify the transaction politically.</br></br>Every major U.S. trading partner almost routinely requires some variation of an offset package as part of the price for making a large sale. Thus France and Britain required Boeing to supplement their recent airborne radar (AWACs) sale to those countries with an offset package worth 30 percent more than the sale itself, West Germany required a $500 million offset from Raytheon for a 1984 Patriot missile sale, and the Canadians required Sperry to offer an offset package that established an electronics company in Canada before purchasing $3 billion in electronics for their navy. The Japanese have made some form of technology transfer a pre-condition for several military purchases from the United States, a ir strong dollar alone did not alone cause the U.S. trade deficit, and the current weaker dollar cannot completely eliminate it. To address the trade deficit, the United States should consider countertrade.</br></br>This country should begin multilateral negotiations with our trading partners to curb their growing appetite for offsets, and should start an offset policy of our own. The focus should be on our allies, and not on U.S. companies, who in the fiercely competitive world should be free to make their best offset offer.