The question of how much Singaporeans benefit from the Comprehensive Economic Cooperation Agreement (CECA), it’s free trade agreement (FTA) with India, is one that crops up often in the public sphere.
It’s a conversation that rarely lets up in Singapore as some people slam the agreement for benefitting India more than it does Singapore, with many Indian nationals coming over to take up jobs here that many critics feel would otherwise go to the local talent pool.
Out of the 26 FTAs Singapore has with various countries, CECA is the one that attracts the most attention and criticism from the public.
Such a hot button issue also became of the key subject matter leading up to the 2020 General Election. Progress Singapore Party (PSP) Secretary General Dr Tan Cheng Bock said in a speech during the official party launch in 2019 that the PSP will ask the government to come up with a balance sheet for how CECA has benefitted Singapore.
“How many local jobs have gone to Indian professionals and how many Singaporeans have gone to India?” asked Dr Tan.
Though many questions have been put to the government over the years regarding the actual data pertaining to talent transfer between Singapore and India under the agreement, among other details, the government’s answers have been scarce.
In an interview with The Straits Times in August 2020, Trade and Industry Minister Chan Chun Sing addressed several “misconceptions” about the CECA. Though it was more detailed that previous clarifications from the government, it still lacked substantial details or data.
Though Mr Chan debunked the misconception that CECA grants Indian nationals unconditional access to Singapore and immigration privileges, he did reveal that when a company brings in intra-coperate transferees (ICTs), the agreement allows them to do so without having to first advertise the position to locals as part of the Fair Consideration Framework.
They do, however, have to still meet the employment pass criteria and have worked with the parent company for at least six month. Although, they transferees can stay in Singapore for a total of eight years at most.
On this point, however, Mr Chan did not get into details on just how many Indian nationals have been employed in Singapore under this agreement nor vice versa with Singaporeans in India.
Back in 2017, blogger and frequent commenter on issues in Singapore, Leong Sze Hian, had asked a question on this exact matter. Mr Leong highlighted the question raised by then-Non-constituency Member of Parliament (NCMP) Gerald Giam from Workers’ Party.
Then-Minister for Trade and Industry, Mr Lim Hng Kiang has responded in Parliament on 8 Oct 2014 that CECA has helped to create good jobs for Singaporeans. He added that CECA serves to bring conveniences to businesses by allowing temporary entry on both sides for certain categories of persons, including business visitors, professionals, and Intra-Corporate Transferees.
However, even then the exact numbers were not revealed.
Dr Joseph Teo in a letter published on TOC in September 2020 noted several “troubling statements” by Mr Chan as he ‘debunked’ of misconceptions around CECA.
Notably, Mr Chan has detailed how CECA advantages Indian nationals and companies and stressed that most of the 164 members of the World Trade Organisation (WTO) have also made commitments on entry of ICTs under the General Agreement on Trade in Services”.
However, Dr Teo then wondered why there is a need for CECA since both Singapore and India are already part of the WTO.
He stressed, “I think that the full significance and impact of this agreement needs to be communicated to Singaporeans, including the number of people admitted into Singapore under this agreement, and in which sectors they are working. Only then can Singaporeans evaluate whether such an agreement is worth supporting.”
In his interview, Mr Chan had also explained how CECA has led to an increase of Singapore companies investing in India. But does this just illustrate how the Indian economy is benefitting from investments by Singapore companies?
Dr Teo also noted, “More to the point, Singaporeans don’t necessarily believe that CECA does not benefit the Singapore economy. What Singaporeans have been trying to tell the government is that CECA does not benefit the average Singaporean economically. All the government’s justifications do not address this point.”
Following from that, WP MP for Sengkang GRC Jamus Lim, who is an economics professor, penned down several reasons why CECA offers more gains to India rather than Singapore.
This includes points that have already been debated publicly, as well as noting the fact that India’s massive population will lead to a flood of Indian nationals into Singapore, more than the other way around.
“Mr Lim pointed out that while the Government said there Singapore companies will benefit from CECA as they will get better access to the Indian market, but there is “no assurance that the net benefits of trade are to be more equally distributed”.
Unfortunately, despite countless questions by various MPs as well as calls from the public for more transparency on how CECA actually benefits the average Singaporean, answers have not been forthcoming.
Till today, the government continues to make motherhood statements on how Singapore has benefited from the CECA agreement, but nothing has been revealed in detail.
What is CECA?
CECA first came into effect in August 2005, thought the intention was first announced by then-Prime Minister Goh Chock Tong and India’s then-Prime Minister Atal Bihari Vajpayee. The two leaders had announced intentions to explore closer economic ties between the two nations with the aim of coming up with a comprehensive economic partnership.
Singapore fielded a 30-member negotiation team led by Heng Swee Keat, the permanent secretary for trade and industry, while India’s delegation was headed by Secretary of Commerce Dipak Chatterjee.
After 13 rounds of negotiation held in India and Singapore over the next three years, CECA was signed off in June 2005 when Prime Minister Lee Hsien Loong made a state visit to India.
According to the Enterprise Singapore website, one of the key benefits of CECA is a tariff reduction of 81% for Singapore-originating exports to India including products such as food, plastics, electronics, pharmaceuticals, and mechanical appliances.
There are criteria that have to be met, of course, including that at least 35% of the product content must originate from either Singapore or India for it to qualify for the tariff reduction.
Another aspect of CECA is that it provides for lateral transfers of professionals. Basically, citizens and permanent residents of either countries are guaranteed entry and stay in the other country as business visitors, short-term service suppliers, professionals hired directly by a company in Singapore, as well as intra-corporate transferees.
The agreement is comprehensive, as the name suggests, and does cover many facets of the economic partnership between Singapore and India, from investments to e-commerce, intellectual property, education, media, and science and technology and more.