Wed. May 29th, 2024

TL;DR – CECA does not give Indian nationals privileged or unconditional access to Singapore. None of our FTAs do.

We’re midway through election fever.

Quite exciting this round since all 93 seats will be contested. While not highly probable, it remains a possibility that the PAP may lose all seats. And it’s definitely possible that we see a coalition government formed after Polling Day on Friday if collectively, the opposition parties can form an alliance with win more seats than the PAP.

Yeps, just like what happened in Malaysia in 2018. Remember Pakatan Harapan? That was formed by four political parties, I remember big victory celebrations back then and Malaysians were looking forward to change.

Fast forward to today. Very little has changed in Malaysia, except that Dr M’s no longer PM.

Consider this: What if they won all seats?

What would happen to Singapore if the PAP loses the 2020 General Election (GE2020)?

If you’re a PAP supporter, then you should be worried, so tell all your friends about the good things the incumbent has done. If you’re a PAP hater, then you should be rejoicing. As it really is a possibility that you get a coalition government formed by the these dudes if enough people #VTO.

Now I want to talk about the Progress Singapore Party (PSP) today.

But first, OMG have you watched these booboos?


So now back to the topic on hand.

We’ve noticed a sudden surge in one of our articles in the past few days.

It’s on CECA and Free Trade Agreements (FTAs). Why would thousands of people suddenly be searching to read a six-month-old article??

Tommy Koh explains CECA and discusses if Indian nationals have taken away Singaporeans’ jobs

A bit of digging led us to PSP.

The Tan-Cheng-Bock-led and Lee-Hsien-Yang-mascoted political party has set out its policies over six pages in its 13-page manifesto. One of the ideas it floated in the manifesto was this one-liner on FTAs:

Review Free Trade Agreements like CECA

But as Mr S Iswaran, who is the leader for the West Coast GRC where Tan is leading his team to contest in, has said, PSP’s manifesto is “a short one filled with broad statements which lack details.”

While there’s no issue with opposition parties saying they want to review FTAs, Mr Iswaran pointed out there is a need to understand that every FTA “is a carefully balanced set of benefits and trade-offs”.

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“A trade-off means you have to give up something in order to get something,.. but they (PSP) don’t tell you what you have to give up in order to get it.”

“So when you decide that you want to take away something from a trade agreement, the country on the other side is not going to then say ‘yes, please do that’ and not do anything about it.”

“So you have to answer the question…what are you going to give up in order to secure the things that you want. Because the other countries are not going to just give you a free pass.”

Mr Iswaran urged his opponents at PSP to explain the trade-offs involved in its call to review Singapore’s free trade agreements (FTAs), and that it is not enough for PSP to make broad promises.

“And the other side, you have a team that has basically put out a very short manifesto with broad statements, but lacking in detail… detail about how they will implement the national programmes or the priorities.”


More importantly, Mr Iswaran shared that FTAs help our SMEs secure market access to large markets such as China, India, United States and Europe.

If Singapore were to cut back on certain things in the FTA, the other countries may do the same in order to look after their interests, and this could mean SMEs here losing out and jobs being affected.

So we think maybe Singaporeans are left wondering after just seeing PSP’s vague one-liner and were searching to read up! But but but, perhaps the PSP team are the ones who really need to be schooled. Do they even have any cogent plans for Singapore?

They fielded 24 candidates, even more than the Workers’ Party. Surely there’re enough brains in the party to put together a more concrete plan?

Free Trade Agreements (FTAs) 101

Singapore is extremely dependent on trade.

This means we’re extremely vulnerable to anti-trade measures, and we’re talking about trade barriers like tariffs and quotas.

Free Trade Agreements (FTAs) are treaties which make trade and investment between two or more economies easier.

When at the negotiation table, we have very little bargaining power because of our size. Our offering to open our domestic market to other countries is really not that attractive, since we’re more like a rounding error to those big countries.

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Imagine Singapore negotiating in bilateral trade agreements with large countries, what do we have to do or offer in order to convince them to open up their large markets to us? Access to our minuscule market? You really think that’s attractive to them?

Singapore is tiny, and the only way our businesses can trade more is to expand our economic space. And we’ve working hard at it for some 20 years.

We want to be party to as many FTAs as possible, and with as many countries as possible. Because, the world, our oyster. It will help our local businesses.

To give you an idea of scale, our FTAs account for over 90% of Singapore’s trade. Now you see the importance of FTAs to our lifeline?

Let’s now talk about CECA

CECA is signed between Singapore and India, one of the largest markets in the world.

FTAs or any bilateral trade agreements are rarely just about the trading of goods and services. There will usually be some freedom of movement of people being negotiated as well.

Yes, CECA also includes a clause that allows the freedom of movement of people to carry out the trade of good and services. It’s written in the agreement, you can go check.

This freedom of movement of people between India (or any other country who has a FTA with us), is always narrowly defined so as to only include activities necessary to carry out trade of goods and services.

It does NOT also allow permanent long-term employment. Yes, this is also true, even of CECA.

The “controversial” clauses in CECA are the allowance of the entry of professionals and inter-corporate transfers.

So who are these so-called professionals? They are defined as specialists who are allowed to stay in Singapore for up to just one year. It’s mainly to facilitate setting up of businesses, of SOPs and transfer of knowledge.

What about  inter-company transfers? Well, these are senior executives transferred from the home (Indian) country to Singapore in order to facilitate the trade of good or services.

There’re certain conditions. These senior executives must have been employed in the home country’s office for at least 6 months, and may not stay for more than 2 years initially. Extension can only be for two more 3-year contracts, provided the company is able to justify the need.

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Now this is the most important part for those of you who are wondering if these Indian foreign talents are stealing your jobs.

Nope, these foreign staff are not stealing jobs from Singaporeans.

Why? Because these foreign companies are setting up in Singapore because of CECA. They would, otherwise, not be here.

So even though they have brought along some Indian foreign talents, the Singapore offices would also hire some Singaporeans. So that’s additional employment for us.

These companies will also pay local taxes, and create economic value and jobs.

This is the whole point of a free trade agreement.

How has CECA benefited Singapore?

Right from the start, the India-Singapore CECA covers tariff reduction/elimination for 82% of Singapore’s exports to India.

That immediately opened up enormous trade opportunities for our Singapore businesses.

The 2nd protocol (upgraded CECA) further reduces or eliminates tariffs for an additional 30 products, thus benefiting even more businesses.

The signing of such FTAs and CECAs help us safeguard market access and ensure a more predictable operating environment for service suppliers.

Did you know that CECA has allowed homegrown companies such as BreadTalk and Teh Yih Jia to expand into the Indian market?

In Professor Tommy Koh’s words, the India-Singapore CECA has benefited Singapore in the following ways:

  •  Eliminated most tariff barriers to access the Indian market;
  •  Enabled DBS Bank and United Overseas Bank to provide integrated banking services in India;
  •  Allows Singapore companies in sectors such as infrastructure, logistics and manufacturing to invest in India with greater confidence due to Ceca’s provisions on intellectual property rights and dispute settlement.

Last words

I have three important points to make, and it concerns the lifeline of all our livelihoods,

  1. Singapore lives by trade.
  2. Singapore lives by trade.
  3. Singapore lives by trade.

So PSP, you clear already hor?

So pray tell, what’s the trade-off you have in mind when you decided to add “Review FTAs like CECA” in your manifesto?

(Featured image via)

Why did PSP Tan Cheng Bock jio SDP Paul Tambyah to challenge PAP Chan Chun Sing to debate on national TV?