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.
- Procurement of Supercomputers
- Procurement of Non-R&D Satellites
- Procurement of Computer products and Services
- Procurement of Telecommunications Products and Services
- Procurement of Medical Technology Products and Services
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 2023)
|
(1000 SDR/YEN |
(1 EURO = ¥140) |
||
|
|
|||
|
SDR |
JPY |
EUR |
|
|
Central Government entities (WTO, Annex 1) |
|||
|
1. Products & services1 |
100 |
15,000 |
107,143 |
|
2. Construction |
4,500 |
680,000 |
4,857,143 |
|
3. Architectural, engineering & Other Technical services related to construction |
450 |
68,000 |
485,714 |
|
4. Services other than 2 & 31 |
100 |
15,000 |
107,143 |
|
Sub-central Government Entities (WTO, Annex 2) |
|
|
|
|
1. Products |
200 |
30,000 |
214,286 |
|
2. Construction |
15,000 |
2,300,000 |
16,285,714 |
|
3. Architectural, engineering & Other Technical services related to construction |
1,500 |
230,000 |
1,571,429 |
|
4. Services other than 2 & 3 |
200 |
30,000 |
214,286 |
|
Other entities |
|||
|
1. Products |
100 (130)* |
15,000 |
107,143 |
|
2. Construction services for entities in Group A except Japan Post |
15,000 |
2,300,000 |
16,285,714 |
|
3. Construction services for Japan Post and entities in Group B 4 |
4,500 |
690,000 |
4,857,143 |
|
4. Architectural, engineering & Other Technical services related to 2 and 3 |
450 |
69,000 |
485,714 |
|
5. Services other than 2 & 3, 4 |
100 (130)* |
15,000 |
107,143 |
* 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.