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 federal circuit`s decision sided with the contractors and confirmed that there were three options for contractors to prove AAT compliance under the FAR, i.e. to show that the final product delivered to the government is significantly transformed: (1) in the United States or in a given country; (2) be produced entirely in a country designated by a free trade agreement; or (3) extracted, manufactured or manufactured in the United States (but not necessarily fully manufactured). In the face of this formulation, suppliers who manufacture products in the United States may have an easier way to comply, unless the FAR is revised to be more in line with the legal language of the TAA.  Despite this strong language, it seems unlikely that this decision will limit the practice of contract agents who require contractors to obtain provisions from the CBP in order to prove compliance with the AA TAA, if only in the form of « advice decisions » that have significant weight. Once the CBP`s decision is received, it is likely that the contract agent will use it to communicate its « independent » destination to the country of origin. While this decision gives contractors ammunition to fight CBP`s costs, it finally appears that this decision can only change the way contract officials document the file. 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. » While the federal circuit appears to confirm this third route of compliance with the AAT, the Federal Circuit`s decision does not provide clear guidelines on how to determine, under the AAT, whether a product is « manufactured » in the United States. The original decision of the first instance proposed to borrow the definition of « production » from the BAA. According to the BAA, a product is considered « manufactured » in the United States if the « cost of its components . . . manufactured in the United States exceeds 50% of the cost of all its components.
» 52 225-1. However, the federal circuit has refused to adopt the BAA standard, as a product may comply with the AAT if it is manufactured in the United States from foreign components and is not necessarily required to meet the 50% requirement for BAA components. Many companies see a chance to use a GSA calendar, but often ask themselves the question: what is taa compliance and how does it affect my business? This article explains what the Trade Agreements Act is, what it means a product is TAA compliant, and why TAA compliance is important for any company that wishes to cooperate with the government through GSA schedules. Since TAA compliance is essential to compliance with the GSA calendar contracts you may have, you must always ensure that your products comply with the Trade Agreements Act requirements for the duration of the contract. Here is a short checklist that you should follow to ensure TAA approval for your products: However, taA does not limit foreign trade outside the scope of federal markets. This means that you can freely sell non-TAA-compliant products on the commercial market.