The Trade Agreements Act (TAA) is a critical compliance requirement for companies selling products to the federal government. Understanding TAA requirements helps ensure your products qualify for government contracts and protects your business from costly compliance violations.
What is the Trade Agreements Act?
The Trade Agreements Act of 1979 requires that products purchased by the federal government be manufactured or substantially transformed in the United States or a designated country. This law supports international trade agreements while ensuring fair competition in government procurement.
Designated Countries
TAA-compliant products must originate from:
- United States: Products made in the USA
- World Trade Organization (WTO) GPA Countries: Including most European nations, Japan, South Korea, and others
- Free Trade Agreement (FTA) Countries: Canada, Mexico, Australia, and others with US trade agreements
- Least Developed Countries: Designated developing nations
- Caribbean Basin Countries: Specific Caribbean nations
Important Note
China is NOT a TAA-designated country. Products manufactured in China generally do not qualify for federal contracts unless they undergo substantial transformation in a designated country.
Substantial Transformation
A product can become TAA-compliant through "substantial transformation" - a manufacturing process that fundamentally changes the product's character or use. Key considerations include:
- The transformation must result in a new and different article
- Simple assembly or repackaging does not qualify
- The country of origin becomes where substantial transformation occurs
- Documentation is essential for compliance verification
TAA Compliance for IT Products
IT products present unique TAA compliance challenges due to global supply chains:
Networking Equipment
Major manufacturers like Cisco typically offer TAA-compliant versions of their products. When ordering, specifically request TAA-compliant SKUs and verify country of origin documentation.
Servers and Storage
Enterprise hardware often has TAA-compliant options. Work with your distributor to identify compliant configurations and obtain necessary documentation.
End-User Devices
Laptops, desktops, and peripherals may have limited TAA-compliant options. Carefully verify compliance before including in government quotes.
"TAA compliance isn't just a checkbox—it's a fundamental requirement that affects every product sold to the federal government. Proper documentation and supplier verification are essential."
Best Practices for Resellers
- Verify at the Source: Confirm TAA compliance with manufacturers before quoting
- Document Everything: Maintain country of origin certificates and compliance documentation
- Use TAA-Specific SKUs: Many manufacturers offer dedicated TAA-compliant product numbers
- Train Your Team: Ensure sales staff understand TAA requirements
- Regular Audits: Periodically review your product catalog for compliance
Consequences of Non-Compliance
TAA violations can result in serious consequences:
- Contract termination
- False Claims Act liability
- Suspension or debarment from federal contracting
- Financial penalties
- Reputational damage
How IAT Solutions Ensures Compliance
At IAT Solutions, TAA compliance is built into our procurement process. We verify compliance for every product we quote to federal agencies, maintain proper documentation, and work exclusively with authorized distributors who can certify country of origin. Our team is trained to identify compliance requirements and ensure every order meets federal standards.
Contact us for TAA-compliant IT products with proper documentation and competitive federal pricing.