Countertrade is an umbrella term used to describe many different types of transactions each in “which the seller provides a buyer with goods or services and promises in return to purchase goods or services from the buyer”. It may or may not involve the use of currency, as in barter.

By far the largest indirect method of exporting is countertrade. Competitive intensity means more and more investment in marketing. In this situation the organization may expand operations by operating in markets where competition is less intense but currency based exchange is not possible. Also, countries may wish to trade in spite of the degree of competition, but currency again is a problem. Countertrade can also be used to stimulate home industries or where raw materials are in short supply. It can, also, give a basis for reciprocal trade.

Countertrade can take many forms. These are: • Barter- is the direct exchange of one good for another. It requires a double coincidence of wants. Barter trade can take a number of formats. Simple barter is the least complex and oldest form of bilateral, non – monetarised trade. Often it is called "straight", "classical" or "pure" barter. • A clearinghouse arrangement- is a form of barter in which the traders agree to buy a certain amount of goods from each other. They set up accounts with each other that are debited and credited as needed. At the maturity of the arrangement, the parties settle up in cash or merchandise. • Switch trading - Practice in which one company sells to another its obligation to make a purchase in a given country. Switch trade is the purchase by a third party of one country’s clearing agreement balance for hard currency. • A buy-back transaction involves a technology transfer via the sale of a manufacturing plant. The seller of the plant agrees to buy back some of the output of the plant once it is constructed. • A counter purchase...