Trade Agreements Act (TAA)

The Trade Agreements Act (TAA) is the Trade Agreements Act of 1979, codified at 19 U.S.C. 2501 et seq., which lets the U.S. government buy products from trade agreement partners on equal terms with U.S. products and bars covered purchases of products from other countries. The Federal Acquisition Regulation (FAR) implements it in Subpart 25.4.

How does the TAA affect hardware sales to the U.S. government?

In acquisitions covered by the World Trade Organization Government Procurement Agreement (WTO GPA), FAR 25.403(c) lets agencies buy only U.S.-made or designated country end products. Under FAR 25.402 (version effective March 13, 2026), the WTO GPA threshold is $174,000 for supply and service contracts.

The U.S. Trade Representative revises most thresholds about every two years. In covered contracts, the clause at FAR 52.225-5 requires the contractor to deliver only U.S.-made or designated country end products unless its offer said otherwise. The Department of Defense (DoD) uses its own clause, DFARS 252.225-7021, for listed end products at the same threshold.

FAR 25.401 lists exceptions, including small business set-asides and acquisitions of arms, ammunition or war materials.

What are designated countries and substantial transformation?

Designated countries are the four groups defined in FAR 25.003: WTO GPA countries, Free Trade Agreement countries, least developed countries and Caribbean Basin countries. Check the current FAR list before bidding.

Origin follows a substantial transformation test. A U.S.-made end product is one made in the United States or "substantially transformed in the United States into a new and different article of commerce with a name, character, or use distinct" from its inputs. The FAR applies the same test to Free Trade Agreement country end products.

How do GSA schedules and the Buy American Act fit in?

The General Services Administration (GSA) states that Multiple Award Schedule (MAS) offerings "are subject to the TAA." Contractors certify each product's country of origin, which GSA Advantage displays.

The TAA is also the authority to waive the Buy American statute. Under FAR 25.402, the U.S. Trade Representative has waived it for eligible products in acquisitions covered by the WTO GPA, Free Trade Agreements or the Israeli Trade Act, so those offers receive equal consideration with domestic offers.