What is the distinction between offsets, counterpurchase, and countertrade?
“Offset” is an umbrella term referring to a range of compensatory commitments that buying governments impose on foreign sellers a condition of sale. These compensatory commitments can include (but are not restricted to) technology transfer, export assistance, local investment, and co-production. “Counterpurchase” is one method governments sometimes permit for satisfying offsets. A counterpurchase is when a foreign seller commits to increasing the sales of companies in the buying country by a specific value amount (e.g., dollars, euros, etc.). This may be accomplished directly by the seller purchasing goods and services from local companies or, more frequently, through the services of a trading company working on the seller’s behalf. A counterpurchase is similar to a barter but differs in that, unlike a barter, the foreign seller is paid in convertible currency in a counterpurchase, and the export commitment (the counterpurchase) is a side commitment to the main sale rather than a finan
