Offset agreement

This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these messages) This article possibly contains original research. Please improve it by verifying the claims made and adding inline citations. Statements consisting only of original research should be removed. (July 2011) (Learn how and when to remove this message) This article may contain unverified or indiscriminate information in embedded lists. Please help clean up the lists by removing items or incorporating them into the text of the article. (October 2018) (Learn how and when to remove this message)

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.