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Trade Agreements Act

The Trade Agreement Act (TAA) is the enabling statute that implements numerous multilateral and bilateral international trade agreements and other initiatives.

The current threshold for the applicability of the Trade Agreements Act (for a supply or service contract) is $203,000. The U.S. Trade Representative revises this threshold approximately every two years (refer to FAR 25.402(b)). GSA applies the threshold on a Schedule-wide basis, and therefore the Trade Agreements Act applies to all Schedule contracts and orders. FAR clause 52.225-5 requires the purchase of products or services that are of US domestic origin or from a “designated country” that has a FTA with the US.

Sometimes an item consists of components from various countries, and the components are assembled in an additional country. It can be difficult to determine which country is the “country of origin.” The trade agreements test to determine country of origin is “substantial transformation” (e.g., transforming an article into a new and different article of commerce, with a name, character, or use distinct from the original article) (refer to FAR 25.001(c)).