Answer to Question 1
Companies countertrading with an indebted nation could find that foreign lenders could have prior claim on goods offered as part of the countertrading agreement. Countertrade arrangements frequently restrict profit margins. Often during negotiations, price setting is difficult because not all cost factors are known. Countertrade practices encourage economic inefficiently. Companies may receive inferior quality products as payment since rigorous quality control may not be a practice in the trading partner's enterprise. Exchange partners could become competitors. Finally, it often happens that the goods that firms receive as payment are unrelated to the products they sell. They usually do not have expertise in marketing these products.
Answer to Question 2
False
