10 Facts About the CECA Issue That Was Mentioned Extensively in Parliament

The influx of foreign talent has been a hot button issue lately. And by lately, I mean for the last 15 years.

Cries of foreigners coming here and supposedly taking jobs away from locals have grown in recent years, as it has in many other countries.

One particularly touchy topic for some Singaporeans here is the Comprehensive Economic Cooperation Agreement between India and Singapore, or CECA.

Singaporeans and members of opposition parties claim that CECA affects the livelihoods of locals, while the government claims the agreement is necessary for Singapore’s economic growth.

Yesterday (6 July 2021), the contentious issue was finally spoken about at length in parliament.

So, what did our MPs have to say about the matter?

Here are 10 facts about the most recent parliamentary debate on CECA:

It’s a Free Trade Agreement

Before we dive into the debate, here’s a burning question: what exactly is CECA all about?

CECA is a free trade agreement (FTA) between Singapore and India that was signed by the two countries in 2005.

It’s India’s first comprehensive bilateral FTA with any country and aimed to strengthen bilateral trade between Singapore and India.

In addition to eliminating tariff barriers, among other things, it also enhances collaboration between the two countries in fields such as science and technology, education, finance, and information technology, to name a few.

Some Singaporeans & Opposition Parties Claim It Grants Indian Nationals Special Immigration Privileges

In recent years, CECA has become something of a lightning rod for anti-immigration sentiments.

Some Singaporeans and opposition party members believe that CECA:

• grants Indian nationals special immigration privileges
• automatically gives them employment passes (EPs)
• allows them to become Singapore citizens and permanent resident

The Progress Singapore Party (PSP) was one of the opposition parties in recent times to criticise the FTA.

The party claimed that the agreement has affected the jobs and livelihoods of Singaporeans and that it’s time to make amendments to the agreement to “rebalance the interests of Singaporeans”.

In May, Law and Home Affairs Minister K Shanmugam challenged PSP’s Non-Constituency MP Leong Mun Wai to debate the issue in parliament, and Mr Leong obliged.

FTA’s & CECA Have Been Made “Political Scapegoats”

The verbal sparring finally commenced yesterday (6 Jul), beginning with a lengthy speech by Health Minister Ong Ye Kung.

Some of the criticism of CECA has been seen by members of the ruling party, including Mr Shanmugam, as efforts to deliberately stoke fears of foreigners as well as encourage racism and xenophobia.

In his parliamentary speech yesterday, Mr Ong argued that PSP has made FTAs, especially CECA, “political scapegoats” in order to discredit the government.

Mr Ong said PSP has repeatedly made false statements that CECA gives Indian professionals “a free hand” to come and work in Singapore.

“These statements are false. They have been repeated for too long,” Mr Ong said.

The Health Minister added that these unfounded criticisms – that CECA allows the unfettered inflow of Indian professionals – have fueled disturbing xenophobic sentiments.

“This is a seductively simplistic argument that workers facing challenges at their workplaces can identify with, and has stirred up a lot of emotions. CECA-themed websites have sprouted, filled with disturbing xenophobic views about Indian immigrants,” he said.

These “toxic views”, he said, have escalated to verbal and physical assaults on Indians, including Singapore citizens.

Nothing in CECA Grants Indian Professionals Unconditional Entry

Mr Ong also debunked the claim that CECA allows the unfettered inflow of Indian professionals.

“Nothing in the agreement implies Singapore must unconditionally let in professionals, managers, and executives (PMEs) from India,” he said.

“Contrary to the Progress Singapore Party’s claim, our ability to impose requirements for immigration and work pass has never been in question in Ceca or any other free trade agreement that we have signed.”

Mr Ong cited two clauses in Chapter 9 of Ceca on the movement of natural persons, one of which stated: “This Chapter shall not apply to measures pertaining to citizenship, permanent residence, or employment on a permanent basis.”

CECA is Part of the Solution

In contrast to what some opposition party members have said, Mr Ong asserted that CECA is not the cause of the challenges our PMEs face, but part of the solution instead.

Mr Ong explained that Singapore is too small a country to survive on its own without tapping into global markets.

In other words, we need the world in order to “earn a living”, he said.

Since 2005 – the year CECA was signed – Singapore’s total trade has nearly doubled from around $890 billion to $1.5 trillion, he said.

CECA Good For Local SMEs

Mr Ong noted that an FTA requires a country to remove or lower tariffs (i.e. taxes) on substantially all trade between FTA partners.

In this way, FTAs are especially important to small and medium enterprises, as they free these businesses from being constrained by Singapore’s small domestic market and give them access to customers abroad.

“We could not have advanced the welfare of Singaporeans to the degree we have without FTAs. When you attack FTAs, and worse if your attack succeeds, you are undermining the fundamentals of our existence,” he said.

“If we accept the basic reality that Singapore needs the world to earn a living, then we would realise the fundamental importance of all our FTAs”.

CECA also gave Singapore a “strategic first-mover advantage” in India, just when the second-most populous country was becoming an economic powerhouse.

The lower tariffs also made Singapore goods more competitive in the Indian market, which partly led to bilateral trade between the two countries growing by over 80%, from $20 billion in 2005 to $38 billion in 2019.

Companies from Singapore who have invested in India have increased as well, which in turn creates more jobs for locals here once these companies grow regionally.

Competition Between Local & Foreign PMEs a Good Thing

According to Mr Ong, the number of Employment Pass (EP) holders in Singapore increased from 65,000 in 2005 to 177,000 in 2020 – an annual growth of 7% and an increase of 112,000.

Conversely, the number of local PMEs grew by more than 380,000 in the same period.

This shows, Mr Ong said, that competition between foreign and local PMEs is not a zero-sum game. In fact, the opposite may often be true.

By combining and complementing local and foreign expertise, we can attract more investments and create more good job and career choices for Singaporeans, Mr Ong said.

“We need to find the right balance where there are more jobs, some competition.

“If someone promises you many more jobs with no competition from foreigners, he is selling you snake oil. It is not possible. It cannot be on any government’s policy menu,” he added.

Number of Jobs Created For Local PMEs Exceeds EPs Handed Out in Finance & Infocomm Sector

As many were calling out for transparency, Manpower Minister Tan See Leng, who also spoke about the issue yesterday, gave the house some figures.

From 2005 to 2020, the finance and infocomm sectors accounted for 40% of the increase in EPs handed out to foreign professionals.

Nevertheless, the number of jobs created for local PMEs exceeded the number of EPs handed out in these sectors.

In infocomm, the number of EPs increased by around 25,000, while 35,000 jobs were created for local PMEs. In finance, the corresponding figures were 20,000 and 85,000.

Increase in Indian EP Holders Not Due to CECA

The proportion of EP holders from India almost doubled to 25% last year from 14% in 2005, but this is not due to CECA, Dr Tan said.

Instead, they have been brought about by the rapid growth of Singapore’s digital economy.

“As every sector seeks to be digitally enabled, their need for tech talent has grown significantly,” he explained.

Unlike China, where locals are staying put and producing start-ups, India’s talent continues to look abroad.

It is currently the largest country of origin for international migrants, he said.

We Should Treat Others Here the Way We Hope to be Treated Abroad

Mr Ong also encouraged Singaporeans to welcome talent from abroad and invite them to fit into society.

“When Singaporeans go overseas to live and work – about 200,000 of us do – we expect the same of ourselves, and hope that we receive hospitable welcomes from our foreign hosts too,” he said.

“We must always be a big-hearted people, even while we grapple with the significant challenges of globalisation to forge the best path forward for Singapore.”

Featured Image: YouTube (CNA)