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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 2021 version)
- Toward Government Procurement Open to the World -  Attachment 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 two years. 

Japan's WTO thresholds

(As of March 2024, Valid for period April 1, 2024 - March 31, 2026)

 

(1000 SDR/YEN

(1 EURO = ¥140)

 

SDR

JPY

EUR

Central Government entities (WTO, Annex 1)

     

1. Products & services1

100

18,000

120,805

2. Construction

4,500

810,000

5,436,241

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

450

81,000

543,624

4. Services other than 2 & 31

100

18,000

120,805

Sub-central Government Entities (WTO, Annex 2)

 

 

 

1. Products

200

36,000

241,610

2. Construction

15,000

2,720,000

18,255,034

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

1,500

270,000

1,812,081

4. Services other than 2 & 3

200

36,000

241,610

Other entities (WTO, Annex 3)

     

1. Products

100 (130)*

18,000

120,805

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

15,000

2,720,000

18,255,034

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

4,500

810,000

5,436,242

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

450

81,000

543,624

5. Services other than 2 & 3, 4

100 (130)*

18,000

120,805

* Between brackets denotes official WTO threshold, Japan applies lower thresholds as part of its "voluntary measures"
 Sources: MOFA, "The Agreement on Government Procurement and our country's voluntary measures and yen-calculation rates" (J), 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.  Reports and statistics submitted by Japan are available here

 

 

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