Trade Agreements Act Qualifying Countries

Here`s how it works: civil agencies add 6% to foreign products offered (12% if the lowest domestic product offer comes from a small company). For example, if Company A offers a domestic product for USD 25,000 and Company B a foreign product for USD 20,000, a civil agency would evaluate the foreign product as if it were 21,200 USD (an increase of 6%) $22,400 (up 12%) if the company offering the foreign product competes with a small company in the United States. If price was the deciding factor, the foreign item would get the contract because it is cheaper, even with the price penalty. Since the tariff preference applies only for evaluation purposes, the government would pay the original proposed price of $20,000. And when a Ministry of Defence authority makes the purchase, finished products and components manufactured in certain qualified countries are considered domestic finished products and more important products (50%) Tariff penalties are added to foreign products when the proposal is evaluated. FAR 52.225-5 lists all “designated countries” for TAA purposes. Among the countries that have signed the WTO ACCORD, have a free trade agreement with the United States, or have been identified as “least developed countries” or “Caribbean basin countries.” If it is an acquisition of the Ministry of Defence, the list of designated countries is even longer, as it also includes those that have been identified as “qualifying countries”. Generally speaking, the AAA applies to U.S. government acquisitions above a certain dollar threshold, typically $193,000 for the purchase of supplies or services, although some individual free trade agreements (. B, for example, Canada, Mexico, Chile and Australia) have lower thresholds. The TAA provides that the U.S. government can only purchase end-of-country products manufactured or designated by the United States.

The list of designated countries is available at FAR 25.003. The TAA does not use the 50% cost test of components such as the BAA. Instead, the TAA uses another original test called the “essential transformation test.” Determining whether a substantial transformation has been made for taa purposes is not based primarily on the value or percentage of the U.S. salary (or designated country) (components), but on whether the product has been given a different character or other use because of the process it has undergone in the United States (or in a given country). Sometimes a product requires assembly in several countries or has components from different countries; TAA compliance becomes more cranky and it is necessary to determine where the product is substantially processed. When a product is manufactured in different countries, the final product must be “essentially redeveloped” in a given country. A substantial transformation would be the transformation of an item into a new article and another trade item with a name, character or other use than the original article. (see FAR 25.001 (c)) b) Delivery of finished products. The contract agent found that the WTO ACCORD and free trade AGREEMENTs apply to this acquisition.

Unless otherwise stated, these trade agreements apply to all items in the calendar. Under this contract, the supplier only supplies finished products manufactured or designated in the United States, unless its offer indicates the delivery of other finished products in the “commercial contract certificate” provision. 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.” Countries that have trade agreements with the United States are designated countries.