Offset agreement

Defense offset agreements are arrangements in which the seller of a product or service agrees to buy products or services from its client as an inducement. These agreement are legal trade practices in the aerospace and military industries, but seen by some as protectionist and distorting of competition.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. 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 defense offsets money is the measure and the medium of exchange.