The Trade Agreements Act (TAA) was created to promote fair international trade with certain designated countries. Companies that work with foreign products or services need to know which companies are limited to comply with taA and GSA. The U.S. government was required to purchase only U.S.-made products and services or finished products from TAA companies. The Trade Agreements Act (19 U.S.C. – 2501-2581) of 1979 was passed to promote fair and open international trade, but more importantly, it implemented the requirement that the U.S. government only buy finished manufactured products or certain finished products. This means, in particular, that, under a MAS program, GSA can only purchase products that are compliant in the United States and/or compliant with the TAA. This requirement has always baffled many MAS contract holders as to their actual meaning.

The Trade Agreements Act was passed to regulate trade agreements between the United States and abroad. One of the main features of the act is that it limits purchases by the U.S. government to products or products manufactured in the United States and manufactured in certain countries. Such products are then called “TAA compliant.” But not all countries have a free trade agreement with the United States, including, most importantly, countries like China and India. Therefore, if a business supplier offers the U.S. government a commodity manufactured in India, for example, that property would not be in compliance with the TAA and the contractor would not be able to supply it to public procurement. However, the TAA does not limit foreign trade outside the scope of federal contracts. This means that you can freely sell non-TAA-compliant products on the commercial market. In this regard, the Tribunal found that domestic end products are classified as products that can be purchased under the AD clause under the BAA and that products “made in the United States” may be purchased regardless of the source of the underlying components and components, even if they are not significantly converted to the United States or a privileged alien. Under the TAA, “substantial processing” is the test for determining the country of origin of a product and its eligibility for waiving the BAA preference for domestic products. Accordingly, the decision removes the anomaly of preferring domestic products to non-eligible foreign products when other trade agreement clauses are used and prohibits the purchase of the same products in contracts above the TA threshold. Under long-standing purchasing rules, buybacks of products other than domestic finished products by the U.S.

government are subject to discriminatory preferences or prohibitions, based on the value of the dollar of purchase and the interaction of two separate statutes: the BAA and the TAA. According to the BAA, as implemented in the Federal Acquisition Regulation (FAR), a “national final product” is defined as “[a]n produced in the United States if -i) the cost of its components extracted, manufactured or manufactured in the United States exceeds 50% of the cost of all its components.