Japan eyes opening procurement bidding, lowering tariffs as EU trade pact bargaining chip

Japan eyes opening procurement bidding, lowering tariffs as EU trade pact bargaining chip

In negotiations with the European Union on an economic partnership agreement, Japan may be reviewing several compromises in areas including university and hospital projects, railway operators, and tariffs, according to several sources.

Tokyo is considering opening up bidding for local university and hospital projects to European companies, sources said, a compromise in a key area of public procurement as both sides aim to reach a broad agreement on the economic pact next month.

Under the World Trade Organization agreement on government procurement, Japan’s central government, prefectures and ordinance-designated major cities are required to allow foreign firms to take part in bidding for projects of a certain scale. The rule, however, does not apply to projects for local government-managed universities and hospitals.

The EU, which allows companies outside the region to participate even in municipal-level bidding, is pressing hard for midsize cities to open up to foreign firms.

But the government remains skeptical about meeting the demand due to concerns about the possible negative impact on local businesses.

In the talks with the EU, Japan also put forward a compromise focused on publicly financed railway operators.

Under the proposal, the companies, including Tokyo Metro Co., Hokkaido Railway Co., Shikoku Railway Co. and Japan Freight Railway Co., along with railway operators run by ordinance-designated major cities, will be required to hold international bidding for construction services and procurement projects beyond a certain value, the sources said.

Tokyo Metro is partly held by the central government, while the three JR companies are fully owned by the state-affiliated Japan Railway Construction, Transport and Technology Agency.

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