Japan Train Standards Push Looks Derailed

China is getting in the way of Japan’s efforts to lead talks potentially worth billions of dollars on common global technical standards for railway systems.

Japan is trying to take the initiative in negotiations under the International Organization for Standardization (ISO) on rules for railway system development. They are currently dominated by Europe.

Railway operators and rolling stock manufacturers in Japan want to get an upper hand in the talks to gain a competitive advantage in the infrastructure industry. Emerging economies are currently spending big on infrastructure. Contracts to assist in railway development in these countries are lucrative.

China’s participation as a key player in these negotiations is almost certain to complicate them. The ISO aims to have the international rules for railway systems decided within three years. The prospects look bleak for Japan.

Consistency counts

The ISO’s latest conference to discuss related issues began Wednesday in Tokyo, with Japan serving as the chair country. Japanese negotiators have proposed new guidelines on technical requirements for the construction and reconstruction of railway systems.

The envisioned guidelines would ensure certain levels of quality are guaranteed in systems no matter where they are built. The ISO last year started negotiations on international standards for railway systems and industries.

Germany and France launched the standards drive as emerging countries increased infrastructure development. There are 27 countries participating in the talks.

Japan’s railway sector jumped into the negotiation process immediately. The World Trade Organization requires member countries to prioritize international standards over corresponding domestic regulations.

Work done by governments or companies that serves public interest must be based on the established international standards. In developing countries, governments often call the shots on infrastructure work.

For any country seeking to promote exports of infrastructure technologies and services, international standards are becoming increasingly important. Standards determine the competitiveness of nations’ infrastructure sectors.

The price isn’t right

Developing countries usually lack adequate experience and expertise in infrastructure. Industrialized nations trying to get involved in railway projects in emerging economies are often frustrated by the vague technical requirements for taking part in contract bidding processes.

The lack of clarity often leads to wide variations in vital specifications such as transport capacity among bidders. That often makes price the deciding factor in selection.

Japan and Europe want to clarify basic standards for railway development to end the confusion. They hope to eliminate the tendency to award contracts based on pricing.

Railway companies in Japan are keen to export their expertise to other countries. JR East is pushing its expertise on all aspects of the railway business, from building railway lines to operating services, overseas. JR Tokai, meanwhile, is stepping up its efforts to sell bullet train systems to other countries with the help of the Japanese government.

The Railway Technical Research Institute, which is affiliated with the JR company group, established in 2010 the Railway International Standards Center. The aim of that institution is to support efforts by the railway sector to assume the leadership in international standards development. The 130 companies providing funds for the center include makers of all kinds of railway equipment and facilities.

Struggling

China has joined the international infrastructure standards fray. It is one of the core member countries that discuss and coordinate railway standards topics in advance of discussions at general meetings.

The government in Beijing is trying to incorporate its domestic standards into the international rules. “China negotiators are getting instructions from officials at higher levels of government,” said a Japanese negotiator. “The officials in charge of the negotiations aggressively push their proposals.”

As the ISO negotiations come to the crucial phase, China’s presence at the table is likely to pose high hurdles for Japan. European countries constitute a majority of the 27 members of the ISO expert committee for the mission.

These industrial nations want to have the European standards adopted internationally. Voting will inevitably work in Europe’s favor, because the region holds the majority of votes. Japan’s quest to influence negotiations is not likely to succeed without a fight.

Source : Nikkei