Trade Agreements Act Vs Buy American Act

FAR 52.225-5 lists all „designated countries“ for TAA purposes. Among the countries that have signed the WTO ACCORD, have a free trade agreement with the United States, or have been identified as „least developed countries“ or „Caribbean basin countries.“ If it is an acquisition of the Ministry of Defence, the list of designated countries is even longer, as it also includes those that have been identified as „qualifying countries“. 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 the BAA, so that the government can purchase products from other „designated countries.“ Designated countries are those that have trade agreements with the United States that require their products to be treated in the same way as domestic U.S. products. The thresholds for the application of the TAA vary according to trade agreements. The most widespread trade agreement is the World Trade Organization`s Agreement on Public Procurement (WTO GPA). The current thresholds for the WTO GPA are $182,000 for goods and services contracts and $7,008,000 for work contracts. As a general rule, the TAA applies in three circumstances: (1) Purchases are valued at more than USD 182,000 for products/services or more than USD 7,008,000 for construction; 2) includes, upon purchase, the products or building materials listed in the trade agreement in question; and (3) None of the other exceptions in trade agreements apply (for example. B contracting is intended for small businesses or is made as a single purchase). There are exceptions to Buy American, exceptions that may be granted for entire products, projects or categories of technology, depending on the verification process and the requirements of a federal authority or agency.

For more information, please see exceptions and waiver declarations. Unlike the BAA, the country of origin of the components is not relevant under the TAA. A product may be TAA compliant, even if 100% of its components are foreign components, as long as the components are widely processed in the United States or in a given country. For example, Company A`s product is 80% Chinese components/materials. These components/materials are largely transformed into the final product in Mexico. The final product is in accordance with the TAA, as the components are basically processed in Mexico, a designated country. Here are two other examples: (1) Company A`s product is 70% domestic components/materials, but it is manufactured in China. It will not be considered a national final product under the BAA, because manufacturing does not take place in the United States (2) What happens if 65% of the cost of Company A`s product comes from its foreign components, but it is manufactured in the United States? Although it is manufactured in the United States, it is not a national final product under BAA, as more than 50% of the cost of its components must be American components. To be an interior final product, it must satisfy both elements of the two-part test. The Buy America Act was a provision of the Surface Transportation Assistance Act of 1982. Buy America`s provisions apply to transit purchases over $100,000 for which grants are provided by the Federal Transit Authority (FTA) or the Federal Highway Administration (FHWA).

The Buy America provisions are a condition for the U.S. federal government to subsidize public, municipal or other agencies, including transit authorities. Buy America`s rules, such as .B. 100% us requirements for iron/steel and manufactured products, Canadian products and services are significantly penalizing if they are all or part of a supplier`s offer, whether in the United States.