1. Removing a long or short position by executing an opposite transaction. 2. A type of countertrade transaction. Offsetting contracts may be required (for large contracts) by the governments of the countries to which the importer intends to import goods. They require the exporter to enter into an additional contract to purchase goods or services from the importing country. In a "direct countervailing" transaction, the exporter is required to set up a manufacturing plant in the importing country or is given a certain percentage of the components that the importer must use in the production of its goods, which it will have previously purchased in the importing country. In an "indirect countervailing" transaction, the importer is required to purchase goods and services from the importing country, without any link to the goods it sells.