Defense and Commercial Trade Offsets: Impacts on the U.S. Industrial Base Raise Economic and National Security Concerns

  • Citation: Petersen, Carol Dawn. “Defense and Commercial Trade Offsets: Impacts on the U.S. Industrial Base Raise Economic and National Security Concerns.” Journal of Economic Issues 45, no. 2 (2011).
    • Topics:
    • Conflict and Security
    • Keywords:
    • commercial trade offsets
    • countertrade
    • defense offsets
    • industrial participation
    • offsets

Defense and commercial trade offsets (also known as countertrade or industrial participation) are valued in the tens of billions of dollars each year andoften accompany the export of advanced technological goods. An offset is any type of non-monetary compensation that a procuring government requires an exporting firm to provide as a condition of the sale and generally commits the exporting firm to spend a certain percentage of the value of the sale in the procuring country. This paper examines 1) how procuring governments use offsets to achieve their goals, and 2) the economic and national security implications of offsets.

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