Trade Agreements Act And Buy American Act

The Trade Agreements Act (TAA) was passed in 1979 to approve and implement various trade agreements between the United States and other countries to promote fair and open international trade. TAA-compliant products can be assembled from parts purchased in these partner countries to meet GSA purchasing requirements. The TAA prohibits the government from purchasing finished products from certain non-designated countries (for example. B China, India), but allows the president to waive national procurement requirements, including BAAs, so that the government can purchase products from other „designated countries.“ „Designated countries“ are those that have trade agreements with the United States, which require their products to be treated in the same way as U.S. domestic products. The thresholds for the applicability of the TAA vary according to the trade agreements. The most widespread trade agreement is the WTO`s World Trade Organization Agreement on Government Procurement (GPA). The current thresholds for the WTO GPA are $182,000 for product/service contracts and $7,008,000 for construction contracts. FAR 52.225-5 lists all „designated countries“ for the purposes of the TAA.

Countries include those that have signed the WTO GPA, have concluded a free trade agreement with the United States, or have been identified as „least developed country“ or „Caribbean Basin country“. When it comes to an acquisition from the Ministry of Defense, the list of designated countries is even longer, as it also contains those identified as „qualified countries.“ As a general rule, the TAA therefore applies in three circumstances: (1) The acquisition is estimated to be more than $182,000 for goods/services or more than $7,008,000 for construction; 2. the purchases are products or building materials listed in the relevant trade agreement; and (3) none of the other exceptions in trade agreements apply (e.g. B procurement is reserved for small enterprises or is carried out as a single source of supply). The BAA applies to supply contracts that exceed the micro-purchase threshold of $2,500 but are below the TAA threshold (currently at $193,000 $US). To comply with the BAA, the product made available must be considered as a national final product. A final domestic product is (1) an unmade finished product that is extracted or produced in the United States; or (2) a finished product manufactured in the United States where the cost of components extracted, manufactured or manufactured in the United States exceeds 50%. Unlike TAA, if a product is not BAA compliant, it can still be purchased by the U.S. government. A non-BAA compliant product is sanctioned by adding 6% or 12% (depending on whether small or large companies are involved) to its price for comparison with BAA-compliant products offered by competitors….