November 26, 2011
Japan’s entry into the Trans-Pacific Partnership (TPP) free-trade pact will deliver a heavy blow to small construction businesses while increasing business chances for foreign companies to bid on local public works projects such as renovation of public school buildings and construction of municipal owned public housing complexes.
Let’s take Kawasaki City in Kanagawa Prefecture as an example.
At present, under a World Trade Organization (WTO) agreement, the national government and governments of major cities and prefectures are required to give foreign companies a chance to bid for public works projects with a minimum established bid. For major city governments, the minimum bid is set at 2.3 billion yen.
However, if Japan enters into the TPP, the contract price of public works projects for international competitive bidding will be lowered to about 700 million yen.
The Japanese Communist Party Kawasaki City assembly members’ group recently released a survey result showing that among public works projects ordered by the city government in 2008, 10 projects would have been awarded to foreign companies if the TPP requirement was applied.
JCP city assembly members’ group chair Takema Koichi said, “If the contract price for international bidding is lowered to 700 million yen, local construction firms will face tough competition from foreign companies and receive a heavy blow to their very existence.”
The JCP lawmakers’ group has urged the city government to make efforts to provide more orders to local construction firms facing survival difficluties.
In response to construction business owners’ demands, the city last year revised its ordinance to increase opportunities for them to win public works contracts.
However, if Japan participates in the TPP, such a measure will be regarded as a trade barrier.
“There is a possibility that the TPP would trample over local government’s efforts to sustain its local economy. Japan must not enter into the TPP,” said Takema.
Let’s take Kawasaki City in Kanagawa Prefecture as an example.
At present, under a World Trade Organization (WTO) agreement, the national government and governments of major cities and prefectures are required to give foreign companies a chance to bid for public works projects with a minimum established bid. For major city governments, the minimum bid is set at 2.3 billion yen.
However, if Japan enters into the TPP, the contract price of public works projects for international competitive bidding will be lowered to about 700 million yen.
The Japanese Communist Party Kawasaki City assembly members’ group recently released a survey result showing that among public works projects ordered by the city government in 2008, 10 projects would have been awarded to foreign companies if the TPP requirement was applied.
JCP city assembly members’ group chair Takema Koichi said, “If the contract price for international bidding is lowered to 700 million yen, local construction firms will face tough competition from foreign companies and receive a heavy blow to their very existence.”
The JCP lawmakers’ group has urged the city government to make efforts to provide more orders to local construction firms facing survival difficluties.
In response to construction business owners’ demands, the city last year revised its ordinance to increase opportunities for them to win public works contracts.
However, if Japan participates in the TPP, such a measure will be regarded as a trade barrier.
“There is a possibility that the TPP would trample over local government’s efforts to sustain its local economy. Japan must not enter into the TPP,” said Takema.
