Counterpurchase

Summary of Counterpurchase

A form of countertrade (read this and related legal terms for further details) in which two parties agree to purchase specified quantities of merchandise from each other at a fixed price. The effect is that each party simultaneously purchases and sells approximately equivalent values of merchandise with the other party. Counterpurchase differs from barter only in that the contracts of purchase and sale are independent of one another (although they are usually executed at the same time), and the sales and purchases are denominated in terms of money, rather than goods. The counterpurchase option is used frequently in transactions with communist nations or developing countries short of foreign exchange.

(Main Author: William J. Miller)

Counterpurchase in International Trade

Meaning of Counterpurchase, according to the Dictionary of International Trade (Global Negotiator): An arrangement whereby exporters agree to purchase a quantity of goods from a country in exchange for the country’s purchase of the exporter’s product. The goods being sold by each party are typically unrelated but may be of equivalent value. This is one if the most common forms of countertrade.