Trade Agreements Act Government Procurement

When the BAA applies, the government must prioritize “domestic finished products” when purchasing supplies and building materials for use in the United States. There are two types of products that are considered “indoor finished products.” The first type is a standard product (COTS) manufactured in the United States. An example of this would be a chair made in Indiana and sold in different furniture houses. The second type is an item manufactured in the United States and composed of more than 50% U.S. components (determined by the cost of components). According to the FAR, a component is “an item, material or delivery directly incorporated into a final product or building material.” An example of this type of domestic final product would be an Indiana-made automotive engine with components from China, Mexico and the United States. As long as more than 50% of the component costs of this engine are broken down, produced or manufactured in the United States and the engine is manufactured in the United States, it is considered a national final product. 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. The TAA generally prohibits the purchase of “foreign or instrumental products” that are not parties to the WTO agreement or that are “designated” by the President for the purposes of the TAA. 19 U.S.C No. 2512 (a) (1). The TAA country of origin test defines “a product of a country” as: in general, the TAA applies in three cases: (1) Purchases are charged at more than USD 182,000 for products/services or more than 7,008,000 USD 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). Indiana has a strong manufacturing sector. The three main manufacturing industries are industrial equipment, automotive, aerospace and defence. As a result, if you are a manufacturer in Indiana, there is a great chance that you will produce items that will eventually be sold to the federal government. The Tribunal agreed with the government that the agreement was no longer in a position to challenge the current application in light of a price prohibiting service or notification.