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EU okays exemption of Japanese railway firms from procurement accord

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A breakthrough on the issue would provide an impetus to negotiations between Japan and the EU on a proposed bilateral FTA

Bernama | 26 June 2014

EU okays exemption of Japanese railway firms from procurement accord

BRUSSELS, June 26 (Bernama) — The European Union (EU) has agreed to accept a request for exempting three Japanese railway operators from obligations under a global government procurement pact, Japan’s Jiji Press news agency reports.

Asked whether the EU will agree to remove the three firms from the list of entities covered by the World Trade Organisation (WTO) agreement on Government Procurement known as GPA, an EU source said: "Yes, they will...after they work out the procedural issues".

The three railway operators are East Japan Railway Co., Central Japan Railway Co. and West Japan Railway Co. which are all private companies.

Since the three firms were previously owned by the state, they stay on the GPA list. The pact obliges signatories not to discriminate foreign suppliers in goods and services procurement by government and public organisations.

Japan tried to remove the three former national railway companies from the GPA list at WTO ministerial talks in 2011, but Tokyo could not achieve the exemption mainly because of the EU’s opposition.

A breakthrough in the issue would provide an impetus to negotiations between Japan and the EU on a proposed economic partnership agreement for free trade, as treatment of the railway operators has been a key stumbling block.

Recently, Japan and the European Commission, the EU’s executive branch, have broadly agreed on a package deal on government procurement in the railway sector.

Briefing the EU’s trade policy committee on the outcome, the commission proposed the exemption of the three Japanese railway firms. The proposal drew negative responses from France, Germany and Spain with big train and railway businesses.

But at a Trade Policy Committee meeting Wednesday, the three countries did not oppose the removal of the three firms from the GPA list after the commission promised to continue to closely monitor Japanese procurement activities in the railway sector.

Japan and the EU will hold their next round of trade talks in the week starting July 7.

— BERNAMA


 source: Bernama