What Are the Main Provisions of Trade Agreements Act

The Trade Agreements Act (TAA) is a U.S. federal law that regulates government procurement and prohibits the purchase of certain products from non-designated countries. The law has implications for businesses that want to sell to the U.S. government or companies that supply goods to government contractors. Here are some of the key provisions of the TAA:

1. Designated countries

The TAA requires that government agencies only purchase products from designated countries. These countries include World Trade Organization (WTO) member countries, as well as countries that have a free trade agreement with the U.S. To be considered a designated country, a country must meet certain standards related to labor rights, human rights, and environmental protections.

2. Non-designated countries

Goods from non-designated countries cannot be purchased by government agencies under the TAA, except in certain circumstances. For example, a non-designated country may be able to sell to the government if the product is not available from a designated country, or if the product is necessary for national security reasons.

3. Country of origin

The TAA requires that products sold to the government must be produced or substantially transformed in a designated country. This means that even if a product is designed by a U.S. company, it may not be eligible for government purchase if it is manufactured in a non-designated country.

4. Compliance certification

Government contractors must certify that their products comply with the TAA. This means that they must be able to identify the country of origin for all components of their products and demonstrate that they are purchasing from designated countries.

5. Penalties for noncompliance

Penalties for noncompliance with the TAA can be severe, including fines, suspension or debarment from government contracting, and even criminal charges. In addition, companies may face reputational damage if they are found to be in violation of the law.

In conclusion, the Trade Agreements Act is an important piece of legislation that regulates government procurement and promotes fair trade practices. Companies that want to sell to the government or supply goods to government contractors must understand the provisions of the TAA and ensure that their products comply with the law. Failure to do so can result in serious consequences, so it is essential to take compliance seriously.