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Published in:
1995 | OriginalPaper | Chapter
Trading Spices for Bicycles — a Simple Countertrade Operation
Author : Richard Willsher
Published in: Export Finance
Publisher: Palgrave Macmillan UK
Included in: Professional Book Archive
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A far eastern trading company, Fetrade, was able to obtain quantities of cloves for international sale. In a separate transaction Fetrade had found a local buyer for a quantity of bicycles. Because Fetrade did not have sufficient substance it could not open a letter of credit with which to pay for the bicycles and so a simple countertrade structure was arranged through CT Bank (CTB), London which linked the two trading operations in order to provide a means of payment (see Figure 38.1).