. /.RESTRICTEDWORLD TRADE
ORGANIZATIONGPA/W/233
7 January 2003
(03-0014)
Committee on Government Procurement Original:  English
RESPONSES FROM JAPAN TO QUESTIONS FROM THE UNITED STATES
RELATING TO JAPAN RAILWAY COMPANIES
Communication from Japan
Please find below Japan's responses to questions from the United States (GPA/W/204)
regarding Japan's notification (GPA/W144-146) rela ting to the East Japan Railway Company, the
Central Japan Railway Company and the West Japan Railway Company.
1. In its response to an earlier US question (GPA/W/180), Japan noted that private railway
companies are not subject to the Guidelines Rega rding Matters that New Companies Should Consider
for the Time Being in the Conduct of their Business (Guidelines), but rather to similar requirements in
other laws.  If private companies are subject to pr ovisions similar to the Guidelines, please explain
why the separate Guidelines are necessary for the Japan Railway Companies.
Part I (Purposes) of the Guidelines provides a detailed explanation about the background and
reasons for the enactment of the Guidelines (cf. GPA/W/179).  The main points are as follows
(cf. detailed explanations of the Guidelines gi ven in previous papers (GPA/W/152 and GPA/W/180)):
- The three Honshu Companies (JR East, JR Central and JR West) were established
through the Reform of the Japanese National Railways (JNR) in 1987 and they have
since then constituted the nationwide railway network, together with the other threeJR Passenger Companies and JR Freight Company.
- As a result, the interconnectivity of their railway networks and the close linkage with
respect to their facilities and business operations has been maintained.
- Therefore, for the purpose of securing the convenience of the customers and
maintaining appropriate conditions for their use, and securing the foundation for the
sound development of the economy and communities of the regions in which the
three Honshu Companies conduct their busi ness, it is still necessary, for the time
being, for the Honshu Companies to conduct their business operations, taking intoaccount the process of the JNR Reform.
The Guidelines are not necessary for other private railway companies because:(1) they have no relationship to the JNR Reform;  and(2) they operate their own railway network de veloped independently of others and have
no close linkage with other companies as the JR Companies have with respect to
railway facilities and business operations.GPA/W/233
Page 2
2. Since the completion of the Government of Japan's sale of its shares in JR East, is JR East
still subject to the Guidelines?  If so, please explain why it is not treated like other private railway
companies that are not subject to the Guidelines.  Does Japan have any plans to remove JR East from
the authority of the Guidelines?
In June 2002, the Japan Railway Construction Public Corporation (JRCPC) completed the
sale of its shares in JR East.  The Guidelines were established for the reasons stated in the response to
question 1 above, but not due to JRCPC's sharehol dings in the three Honshu Companies.  Therefore,
the Guidelines remain applicable, for the time bein g, to JR East after the completion of the sale.
3. How does the Government's authority and oversight over JR East differ from its authority and
oversight over JR West and JR Central, in which it continues to hold shares?
As stated above, the Guidelines were not established with regard to JRCPC's shareholdings.
Accordingly, after JRCPC's sale of shares of JR East, JR East is not treated differently from JR West
and JR Central for the purpose of the application of the provisions in the Guidelines.
4. If JR East were removed from Appendix I, would it continue to coordinate common
procurement for other Japan Railway Companies?  If so, would such procurement be conducted in
accordance with the Agreement on Government Procurement?
As already stated in Japan's previous comm unication (GPA/W/180), JR East has coordinated
common procurement only for rails of other Japan Railways Companies.  Since the notification
regarding the deletion of JR East from Japa n's Appendix I (GPA/W/144) has not yet become
effective, it has not been decided whether JR East will continue to conduct common procurement of
rails after it is removed from Japan's Appendix I.
(In this context, Japan wishes to note that the Government of Japan has never requested or
advised JR East to coordinate common procurement of rails.  Under the Amendment Law
(cf. GPA/W/152) the Government of Japan has no right to control or influence the procurement
conducted by the three Honshu Companies.  Since the JR Passenger Companies conduct the joint
procurement of rails on a purely voluntary basis in order to reduce the costs (cf. GPA/W/180, p.7),
Japan sees no relevance of this issue to government control or influence over the entity under
Article XXIV:6(b).  With a view to expediting the consultations, Japan requests the US to statespecific concerns as well as the reasons why this issue is relevant under this Article if it wishes further
clarification.)
__________