Japan signed up to the World Trade Organisation Agreement on Public Procurement (GPA) in 1994, to create better opportunities for foreign companies in the signees’ respective countries.  Concretely this means that country who joined the GPA take measures to ensure fair and equal treatment of suppliers irrespective of whether they are a domestically based company or based in one of the other signees’ countries. 

The parties in the agreement agreed to establish a minimum threshold for public procurement tenders, where these rules apply.  As a result, there are two categories of tenders, those that fall within the WTO GPA regime and those that do not. In practice in Japan, this means that WTO tenders notices will be accompanied by an English language summary and others will not, and in case of contracting issues non-WTO tenders will give less protection against unfair treatment and ways of redress.

[1] WTO Agreement of Government Procurement

[2] Protocol Amending the Agreement of Government Procurement (March 2012)

Ever since, there has been persistent criticism on the Japanese government from the US and the EU, as the share of foreign companies in public procurement has remained low. 

Voluntary measures on government procurement

 In reaction to foreign pressures in the nineties of the last century, the Japanese government has taken some additional measures to improve access for foreign companies.  These include measures for a number of specific sectors, these specific measures were updated in 2014.

[3] Cabinet Office, Japan's Government Procurement: Policy and Achievements Annual Report (FY 2013 version)
- Toward Government Procurement Open to the World -  Attachments 1.

 

Thresholds

To promote foreign companies entering the market, the Japanese government has also adopted lower thresholds that stipulated in the WTO GPA for certain categories. The thresholds and their corresponding yen values are updated every few years. 

 

Japan's WTO thresholds

(As of April 2016)

  (1000 SDR/YEN (1 EURO =

 ¥125

 

 

SDR

JPY

EUR

Central Government entities

     

1. Products & services1

100

16,000

128,000

2. Construction

4,500

740,000

5,920,000

3. Architectural, engineering & Other Technical services related to construction

450

74,000

592,000

4. Services other than 2 & 31

100

16,000

128,000

Sub-central Government Entities2

 

 

 

1. Products

200

33,000

264,000

2. Construction

15,000

2,470,000

19,760,000

3. Architectural, engineering & Other Technical services related to construction

1,500

240,000

1,920,000

4. Services other than 2 & 3

200

33,000

264,000

Other entities3

     

1. Products

100

16,000

128,000

2. Construction services for entities in Group A except Japan Post

15,000

2,470,000

19,760,000

3. Construction services for Japan Post and entities in Group B 4

4,500

740,000

5,920,000

4. Architectural, engineering & Other Technical services related to 2 and 3

450

74,000

592,000

5. Services other than 2 & 3, 4

130

16,000

128,000


Voluntary measures

Prefectures and 19 designated cities

3 126 entities

4 see, MOFA, (2014) Suggestions for Accessing the Government Procurement Market of Japan, page 39, or http://www.jetro.go.jp/en/database/procurement/procurement.html

 

Japan’s reporting to WTO

 As part of the WTO GPA, members are also required to annually report on public procurement and the extent to which foreign tenderers have been successful in winning contracts.  Japan has issued these reports since 1997. The statistics issued are only limited to tenders falling under the WTO regime.

[4] WTO, Statistics reports under Article XiX:5 of the GPA

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