The Trade Agreements Act 1979 (TAA), Pub.L. 96-39, 93 Stat. 144, promulgated July 26, 1979, codified as 19 U.S.C ch. 13 (19 U.S.C§ 2501-2581), is an act of Congress that regulates trade agreements negotiated between the United States and other countries under the Trade Act of 1974. It provided modalities for the implementation of the Tokyo Round of the General Agreement on Tariffs and Trade. The second of these statutes is the TAA. The TAA was designed to encourage foreign countries to enter into reciprocal trade agreements on government procurement. These agreements prohibit foreign countries from discriminating against products made in America and prohibit the United States from discriminating against products of foreign origin. By law, countries that have such agreements and do not discriminate against products made in the United States can compete with non-discriminatory conditions to obtain a U.S. government.
At the same time, products from countries that have not concluded such trade agreements are excluded from government procurement. Countries that have concluded such agreements are designated as parties to the World Trade Organization (“WTO”) agreement. . The rules on whether the BAA or TAA apply to a given market are quite confusing and the analysis required to determine BAA compliance is very different from the TAA compliance analysis and is not particularly intuitive. The BAA was designed to prevent foreign products from competing on an equal footing with products made in the United States. The Federal Circuit briefly summarized the main features of the BAA: the FAR regulates the TAA and harmonizes it with the BAA. As is the case here, the FAR trade agreement clause provides that a contractor “shall only deliver, under this contract, finished products manufactured or designated in the United States.” FAR 52.225-5 (b). The FAR defines “finished product manufactured in the United States” as follows: the following list was extracted from the Federal Acquisition Regulation (FAR) and was last updated in November 2016 with the addition of Moldova and Ukraine and is current as of June 2020.
To access this FAR clause directly, click here: Federal Acquisition Regulation (FAR) 52.225-5, Trade Agreements. With respect to the merits of the protest and the Federal Court of Claims` analysis, the Federal Circuit first rejected the government`s argument that CBP`s country of origin determination was binding on the VA. The court ruled that it is the central purchasing body, not CBP, that “is responsible for determining whether a proposed product qualifies as a finished product manufactured in the United States.” CBP`s observations to the contrary are not entitled to reservations. © Morrison & Foerster LLP – | Attorney Advertising Failure to comply with the TAA may result in a U.S. False Claims Act. A government that can provide considerable damages to companies that have allegedly defrauded government authorities. In fiscal year 2017, there were a total of 799 cases of FCAs, resulting in $3.7 billion in federal recoveries. The protester, a contractor for the VA and other agencies, was a distributor of generic drugs. As is the case here, the protester provided entecavir tablets (for the treatment of hepatitis B) made in New Jersey using an active pharmaceutical ingredient made in India.
India is not a “designated country” subject to preferential treatment under the TAA and its terms of application. In the Commission, the Court of Claims should find that, under the TAA, a pharmaceutical product using [pharmaceutical substances] manufactured in India does not become the “product” of India; and (2) according to the FAR, the term “finished product manufactured in the United States” may include products manufactured in the United States using [pharmaceutical substances] produced in another country. . . .