The The Trade Agreements Act (TAA) and its companion, the Buy American Act (BAA), both set policies for a preference for increased domestic purchases by the federal government and its contractors. However, the TAA is designed as kind of a counterweight to the BAA. The BAA (passed in 1933), “the first of the major domestic content restriction laws, requires federal agencies to apply a price preference for ‘domestic end products’ and use ‘domestic construction materials’ for covered contracts performed in the United States.” So, the BAA encourages use of US-produced goods.

The TAA, on the other hand, waives some of those requirements in favor of certain countries. The TAA permits waiver of BAA “domestic content restrictions” with respect to certain “countries that have trade agreements with the United States.” So, for “covered end products or construction materials imported from a designated country” where they are manufactured or transformed “are treated as domestic end products or materials for purposes of the BAA.”

A recent change to the FAR updates the thresholds at which the TAA becomes applicable to federal procurements. Because these thresholds can change, it can have an impact on which contracts are applicable to the TAA versus the BAA.