The Trade Agreements Act (TAA) is a federal law that governs government procurement of goods and services. It was enacted in 1979 to ensure that purchases made by the federal government were in compliance with trade agreements between the United States and other countries.
The TAA requires that products purchased by the federal government must be manufactured or “substantially transformed” in the United States or in a designated country. Designated countries are those that have trade agreements with the United States, such as Canada, Mexico, and the European Union.
In order for a product to be considered “substantially transformed”, it must undergo a significant change in its composition or function. This means that simply assembling parts that were manufactured in different countries does not meet the TAA’s requirements.
The TAA’s restrictions apply to all federal agencies and their contractors, and violations can result in fines, contract termination, and suspension or debarment from doing business with the federal government.
The TAA’s requirements can be challenging for government contractors who source products from a global supply chain. However, there are ways to ensure compliance with the law. One option is to source products from designated countries or to manufacture products in the United States. Another option is to request a waiver from the TAA’s requirements if a product is not available from a designated country.
Overall, the TAA plays an important role in promoting fair trade practices and protecting American jobs. As a professional, it is important to understand the TAA and its requirements in order to effectively communicate this information to readers. By providing clear and concise information about the TAA, we can help ensure that both government agencies and their contractors are in compliance with the law.