Question 1

When a firm builds a plant in a country and agrees to take a certain percentage of the plant's output as partial payment for the contract,it is called:

Accepted Answer

A buyback occurs when a firm builds a plant in a country-or supplies technology,equipment,training,or other services to the country-and agrees to take a certain percentage of the plant's output as partial payment for the contract.

Question 2

_____ agreement may be required by the government of a country that has a problem in paying for imports.

Accepted Answer

A countertrade agreement may be required by the government of a country to which a firm is exporting goods or services.

Question 3

From an exporter's perspective,why is an offset more attractive than a straight counterpurchase agreement?

Accepted Answer

From an exporter's perspective,an offset arrangement is more attractive than a straight counterpurchase agreement because it gives the exporter greater flexibility to choose the goods that it wishes to purchase.

Question 4

Why do many neophyte exporters have problems when first trying to do business abroad? What are the common pitfalls experienced by neophyte exporters?

Accepted Answer

The answer of Why do many neophyte exporters have problems...

Question 5

What are the guidelines that can help a novice exporter to increase the probability of exporting successfully?

Accepted Answer

The answer of What are the guidelines that can help...

Question 6

Explain how the Small Business Administration (SBA)can help potential exporters.D.C.Through its Service Corps of Retired Executives (SCORE)program,the SBA oversees some 850 volunteers with international trade experience to provide one-on-one counseling to active and new-to-export businesses.The SBA also coordinates the Export Legal Assistance Network (ELAN),a nationwide group of international trade attorneys who provide free initial consultations to small businesses on export-related matters.

Accepted Answer

Countertrade contracts may involve the exchange of unusable or poor-quality goods that the firm cannot dispose of profitably.

Question 7

Occidental Petroleum negotiated a deal with Russia under which Occidental would build several ammonia plants in Russia and as partial payment receive ammonia over a 20-year period.This is an example of:

Accepted Answer

A buyback occurs when a firm builds a plant in a country-or supplies technology,equipment,training,or other services to the country-and agrees to take a certain percentage of the plant's output as partial payment for the contract.

Question 8

Describe the meaning of export management companies.What are the advantages and drawbacks of using EMCs?

Accepted Answer

The answer of Describe the meaning of export management companies.What...

Question 9

A U.S.firm sells some products to China.China pays the U.S.firm in dollars,but in exchange,the U.S.firm agrees to spend some of its proceeds from the sale on textiles produced by China.Which type of countertrade is this?

Accepted Answer

Counterpurchase is a reciprocal buying agreement.It occurs when a firm agrees to purchase a certain amount of materials back from a country to which a sale is made.

Question 10

Briefly describe the role of the U.S.Department of Commerce in helping U.S.firms increase their knowledge of export opportunities.

Accepted Answer

The answer of Briefly describe the role of the U.S.Department...

Question 11

What is the main attraction of countertrade?

Accepted Answer

Countertrade's main attraction is that it can give a firm a way to finance an export deal when other means are not available.

Question 12

Countertrade is most attractive to:

Accepted Answer

Countertrade is most attractive to large,diverse multinational enterprises that can use their worldwide network of contacts to dispose of goods acquired in countertrading.

Question 13

When a specialized third-party trading house is used in a countertrade arrangement,it is called:

Accepted Answer

The term switch trading refers to the use of a specialized third-party trading house in a countertrade arrangement.

Question 14

What are sogo shosha? How do sogo shosha help Japanese exporters? What role do they play in countertrade?

Accepted Answer

The answer of What are sogo shosha? How do sogo...

Question 15

When a firm enters a(n)_____ agreement with a country,it often ends up with what are called counterpurchase credits,which can be used to purchase goods from that country.

Accepted Answer

When a firm enters a counterpurchase or offset agreement with a country,it often ends up with what are called counterpurchase credits,which can be used to purchase goods from that country.

Question 16

A U.S.firm concludes a counterpurchase agreement with Poland for which it receives some number of counterpurchase credits for purchasing Polish goods.The U.S.firm does not want any Polish goods,however,so it sells the credits to a third-party trading house at a discount.The trading house finds a firm that can use the credits and sells them at a profit.This is an example of

Accepted Answer

Switch trading occurs when a third-party trading house buys the firm's counterpurchase credits and sells them to another firm that can better use them.

Question 17

_____ occurs when a third-party trading house buys the firm's counterpurchase credits and sells them to another firm that can better use them.

Accepted Answer

Switch trading occurs when a third-party trading house buys the firm's counterpurchase credits and sells them to another firm that can better use them.

Question 18

In a(n)_____ one party can fulfill the obligation with any firm in the country to which the sale is being made.

Accepted Answer

An offset is a buying agreement similar to a counterpurchase,but the exporting country can then fulfill the agreement with any firm in the country to which the sale is being made.

Question 19

Identify a drawback to countertrade.

Accepted Answer