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Offsets are compensatory trade agreements, reciprocal trade agreements,[1] between an exporting foreign company, or possibly a government acting as intermediary, and an importing entity. Offset agreements often involve trade in military goods and services and are alternatively called: industrial compensations, industrial cooperation, offsets, industrial and regional benefits, balances, juste retour or equilibrium, to define mechanisms more complex than counter-trade.
Counter-trade can also be considered one of the many forms of defense offset, to compensate a purchasing country.[2] The incentive for the exporter results from the conditioning of the core transaction to the acceptance of the offset obligation.[3]
The main difference between a generic offset and counter-trade, both common practices in the international defense trade, is the involvement of money. In counter-trade, goods are paid through barters or other mechanisms without the exchange of money, while in other generic offsets money is the main medium of exchange.
^Counter-trade is an indirect offset. As a general introduction to the topic see J. Brauer -J. P. Dunne Arms Trade Offsets and Development, 2005 (Martin, 1996, Udis and Maskus, 1991).
^Ianakiev, Gueorgui (2014), " Defence Offsets : Regulation and Impact on the Integration of the European Defence Equipment Market ", in Bellais, Renaud (ed) (2014), "The Evolving Boundaries of Defence : An Assessment of Recent Shifts in Defence Activities ", Emerald Group Publishing Limited.
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