Trade Agreement Act Compliant Countries: A Guide to Doing Business

If you are looking to do business with the US government, it is important to understand the Trade Agreement Act (TAA) and its compliance requirements. The TAA was enacted in 1979 and requires products sold to the US government to be made in the United States or a TAA-compliant country. In this article, we will provide an overview of TAA-compliant countries and what it means for businesses looking to sell to the US government.

What is TAA Compliance?

The TAA is a law that requires federal agencies to only purchase products made in the United States or in designated countries that have trade agreements with the US. The law applies to “end products” and “components” which are defined as items that are sold to the federal government as a finished product or used to make a finished product. The TAA does not apply to services or construction products.

To be considered TAA-compliant, a product must be manufactured or “substantially transformed” in a TAA-compliant country. The final product must contain at least 50% of its value from the US or a TAA-compliant country. In addition, the product must comply with the requirements of the specific trade agreement that governs the country of origin.

Which Countries are TAA-Compliant?

The US government has trade agreements with many countries designed to promote free trade and economic growth. However, not all of these countries are TAA-compliant. Currently, there are 127 TAA-compliant countries that are eligible to sell products to the US government.

Some of the largest TAA-compliant countries include:

– Canada

– Mexico

– Japan

– South Korea

– Australia

– New Zealand

– Switzerland

– Norway

The US government also has trade agreements with the European Union, which is considered a TAA-compliant entity, as well as several other countries in Asia, Central America, and South America.

Why is TAA Compliance Important?

For companies looking to do business with the US government, TAA compliance is critical. Failure to comply with the TAA could result in the rejection of your bid or contract, as well as potential legal penalties. In addition, TAA-compliant products are often preferred by federal agencies as they are seen as supporting US jobs and the economy.

How to Ensure TAA Compliance

To ensure TAA compliance, businesses should work with their suppliers to ensure that the products they are selling to the US government meet the requirements of the law. This can include verifying the country of origin and ensuring that the product meets the specific requirements of the trade agreement that governs that country.

In addition, businesses should keep accurate records and documentation of their compliance efforts. This can help demonstrate compliance in the event of an audit or legal challenge.

Conclusion

If you are looking to do business with the US government, it is important to understand the requirements of the Trade Agreement Act and its compliance requirements. By working with TAA-compliant countries and ensuring that your products meet the requirements of the law, you can increase your chances of success and avoid potential legal penalties. With this guide to TAA-compliant countries, you can make informed decisions and conduct business with confidence.