Overview
This section explains the authority under the Trade Agreements Act (TAA) to waive the Buy American statute for eligible products from trade partner countries and establishes the specific dollar thresholds that trigger the applicability of various international trade agreements.
Key Rules
- Waiver Authority: The U.S. Trade Representative has the authority to waive Buy American restrictions and other discriminatory provisions for eligible products from countries that have signed international trade agreements (e.g., WTO GPA, FTAs).
- Equal Consideration: Offers of eligible products from designated countries must be treated as equal to domestic offers during the evaluation process.
- Origin of Services: The country of origin for services is determined by the country in which the firm providing the services is established.
- Dollar Thresholds: Trade agreements only apply if the acquisition value meets or exceeds specific dollar amounts, which are generally revised every two years.
- Agreement Categories: Specific thresholds are provided for the World Trade Organization Government Procurement Agreement (WTO GPA), various Free Trade Agreements (FTAs), the United States-Mexico-Canada Agreement (USMCA), and the Israeli Trade Act.
Practical Implications
- Contracting Officers must verify the current dollar thresholds before solicitation to determine if the Buy American statute is waived or if specific trade agreement clauses must be included.
- When an acquisition exceeds the TAA threshold, the typical price preference penalties applied to foreign end products under the Buy American Act are removed for "eligible products," leveling the playing field for international bidders from treaty-partner nations.