The Trade Agreements Act mandates that all products on your GSA contract must be manufactured or “substantially transformed” in a designated country. Substantial transformation is a legal phrase that means the following: “transforming a product into a new and different article of commerce with a name, character, or use distinct from the original product.” This substantial transformation must be 50% of the production, take place in a TAA compliant country, and that country needs to be the last stop before it comes to the US to be sold on GSA shelves. This does not mean you can source components for a product and just assemble it once it hits the US. That would not qualify as substantial transformation. This topic can certainly get a little sticky, and there is frequent litigation around interpreting this clause. If you have questions about whether your products make the cut, please feel free to reach out to us and we can point you in the direction of a lawyer who can help!
Read More