More than 60 governments have become active participants in countertrade activities and others have put requirements on some aspects of privately conducted trade. Several factors such as the improvement of current account, high foreign debt, and the imperfect market. etc.. have been suggested as the motives of the countertrade. Based on the barter, counterpurchase, and buy-back transactions, this study shows that countertrade is used more often as a marketing tool rather than a payment mechanism in order to solve a liquidity crunch in international business.

• Sun Dai Hwang