What is TAA Compliance?
TAA compliance is important for businesses that want to sell their products to the U.S. government. It ensures that their products are eligible for government contracts. This means that a product must be made in the United States or a designated country.
Trade Agreements Act compliance refers to the requirements that certain products must meet in order to be eligible for procurement by the United States government. The TAA is a federal law that was enacted in 1979 to promote fair trade and level the playing field for U.S. businesses competing in the global market.
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There are 3 different categories of TAA-compliant products, including
- domestic end products – made entirely in the United States
- designated country end products – made in a country that has a trade agreement with the United States (TAA Compliant products made outside of the U.S.)
- foreign end products – made outside of the United States and do not meet the requirements for designated country end products
What is required to be TAA compliant?
For TAA compliance, a product must either be made in the United States or a designated country, or it must have undergone a significant change in form, fit, or function in one of these countries. This process, known as substantial transformation, can be demonstrated by showing that at least 50% of production occurred in a TAA-approved country, or that the changes made in one of these countries were essential to the end product’s purpose and function.
It is important to ensure that the products on your GSA Schedule meet these TAA requirements in order to be eligible for procurement by the U.S. government.
There are many resources available to help businesses understand and meet TAA compliance requirements, including:
These resources provide guidance on how to determine whether a product is TAA compliant and how to properly label and certify products as TAA compliant. This interview with a TAA Specialist is also a great way to learn the nuances of the Trade Agreement Act:
Why Keep to TAA Compliance
There are Pros and Cons to taking on the burden of certifying that a group of your products are TAA Compliant, and it is very important to consider what you are getting into before jumping into the GSA or Federal market.
Pros – Selling to the U.S. federal government can be very lucrative, opening up your company to many high-dollar opportunities. This is oftentimes the quickest way to grow your company
Cons – TAA Compliance can be a steep learning curve, and self-certifying a product can be difficult at first. Also, Some distributors offer thousands of products from hundreds of Brands. This makes it difficult to confidently certify all products without some very solid systems and close relationships with Manufacturers.
It is noteworthy that the government does go after companies who they feel have made false claims about TAA products to government buyers. Every year, there are several cases where a company was selling non-compliant products as though they were … and there are often some very steep penalties.
What Countries Are TAA Compliant?
The full list of TAA compliant countries can be found HERE.
This list has been designated by the Trade Agreements Act (TAA). You can determine TAA Compliance of a government purchase in detail within
These countries include the United States and other countries with trade agreements with the U.S. in the following categories:
• World Trade Organization Government Procurement Agreement Countries
• Free Trade Agreement Countries
• Least Developed Countries
• Caribbean Basin Countries
Non-TAA compliant countries are omitted form the list, including, but not limited to:
China, India, Indonesia, Iran, Iraq, Malaysia, North Korea, Pakistan, Russia, Sri Lanka, …
It is important for businesses to be aware of TAA compliance requirements and to ensure that the products they offer for procurement meet these requirements.
Armenia, Aruba, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Israel, Japan, Republic of Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Moldova, Montenegro, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Taiwan, Ukraine, United Kingdom
Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Republic of Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, Singapore
Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, Laos, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nepal, Niger, Rwanda, Samoa, Sao Tome and Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, South Sudan, Tanzania, Timor-Leste, Togo, Tuvalu, Uganda, Vanuatu, Yemen, Zambia
Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Bonaire, British Virgin Islands, Curacao, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saba, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Sint Eustatius, Sint Maarten, Trinidad and Tobago
How to keep TAA Compliance
It is important for businesses with GSA Schedule contracts to ensure that their products remain TAA compliant throughout the performance period of their contract. This can be achieved by following a few key steps:
1) Carefully select suppliers of components, parts, and materials for your manufactured goods. Make sure that at least 50% of the value of your product comes from the U.S. or designated countries.
2) If your GSA contract involves shipping goods manufactured by a third party, ensure that these products are made in TAA-compliant countries.
3) Clarify the origin of all source parts and materials provided by your partners. Also, make sure that each component has proper supply documentation and agreements.
4) Keep a detailed inventory of your ordered parts or goods. Make sure to check the TAA status of components on a regular basis to ensure compliance.
5) Stay up-to-date on any changes or amendments to the TAA and FAR, as the list of TAA-compliant countries and other requirements may change over time.
6) By following these steps, businesses can ensure that their products remain TAA compliant and eligible for procurement through their GSA Schedule contract.
FAQs About TAA Compliance?
Yes, TAA is the sourcing requirement that GSA Contracts are kept to.
Buy American does not allow any foreign end-products, even f there is a Trade Agreement in place. Only USA products are allowed to be sold under Buy American orders.
Yes, The list of countries above also applies to where labor can (and cannot) be sourced. Talk to your KO about the specifics of a contract’s requirements.
Yes, there are some exceptions. The main one revolves around the COVID -19 pandemic.
Yes, software is kept to the same standards as all tangible products.