Offset Requirements

Offset Requirements in International Trade

Meaning of Offset Requirements, according to the Dictionary of International Trade (Global Negotiator): A type of counter trade transaction, in an offset contract, which may be required by an importer's government as a condition for approval of major sales agreements, the exporter makes an additional agreement to buy goods and services from the importer's country. There are two types of offset requirements:

Direct offset: the exporter may be required to establish manufacturing facilities in the importing country or to use a specified percentage of the components in the product sold from the importer's country.

Indirect offset: the exporter may be obliged to buy goods o services from the importing country without any link to the product sold.

See countertrade.