10 Developed country partners in countertrade contracts have had problems with quality and timely delivery of goods from the developing country partners How are they trying to deal with those problem?

Answer 1

The age-old twin problems with goods coming from the developing country side of countertrade transactions are product quality and delivery reliability. In general, there are two ways the developed country side is coping with those problems. One solution is inspection of the goods before they leave the developing country plant by a reliable third-party organization. Two such organizations are the Paris-based Bureau Veritas and the Societé Generale de Surveillance, whose main office is in Geneva. Roger Gyarmaty of Veritas says, "We go back to the production process to see if the goods are being made to specifications. We see to it that delivery times and terms are being met. And we check the packaging and loading to be sure the goods are not damaged at those points. Companies can save up to two or three times the cost of our services just through fewer headaches when they receive the goods." A second solution is growing in popularity. The Eastern European banking structure is developing, and the developed country countertrade party is increasingly getting a guarantee of quality and delivery from a bank in the developing country. When such a guarantee has been given, the bank takes a stern interest in the product's production line to avoid having to come up with precious foreign exchange in the event of quality or delivery that is not in accordance with the contract.