Trade Agreements
Contractors must deliver only U.S.-made or designated country end products under contracts subject to trade agreements, unless otherwise specified in their offer.
Overview
FAR 52.225-5, Trade Agreements, implements the requirements of the Trade Agreements Act (TAA) by specifying which products may be delivered under government contracts subject to trade agreements. The clause defines key terms such as “designated country end product,” “U.S.-made end product,” and outlines which countries qualify as designated countries under various trade agreements (WTO GPA, FTA, least developed, and Caribbean Basin countries). It also details the criteria for determining whether a product qualifies as a designated country end product, including substantial transformation requirements and specific exclusions for certain products. Contractors are required to deliver only U.S.-made or designated country end products unless otherwise specified in their offer. The clause also references the Trade Agreements Certificate provision for exceptions.
Key Rules
- Definitions of End Products
- Provides detailed definitions for U.S.-made, designated country, WTO GPA, FTA, least developed country, and Caribbean Basin country end products, including substantial transformation criteria and specific exclusions.
- Delivery Requirements
- Contractors must deliver only U.S.-made or designated country end products unless they have specified otherwise in their offer via the Trade Agreements Certificate.
- Applicability of Trade Agreements
- The clause applies when the WTO GPA and FTAs are determined to be applicable to the acquisition, generally for contracts above certain dollar thresholds.
Responsibilities
- Contracting Officers: Must determine applicability of trade agreements and ensure the clause is included in relevant solicitations and contracts.
- Contractors: Must certify and deliver only compliant end products (U.S.-made or designated country), unless exceptions are specified in their offer.
- Agencies: Oversee compliance and may review certifications and product origins.
Practical Implications
- Ensures compliance with international trade agreements and supports fair competition among eligible countries.
- Contractors must carefully assess product origins and transformations to ensure eligibility.
- Non-compliance can result in bid rejection, contract termination, or penalties. Common pitfalls include misunderstanding substantial transformation or failing to properly certify product origin.