CECA: What is it and why is PSP's Leong Mun Wai talking about it?

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Leong Mun Wai, PSP candidate for West Coast GRC, at a press conference on 14 July 2020. He was announced as one of the party's two picks to take up an NCMP post in in Parliament. (PHOTO: Dhany Osman / Yahoo News Singapore)
Leong Mun Wai, PSP candidate for West Coast GRC, at a press conference on 14 July 2020. He was announced as one of the party's two picks to take up an NCMP post in in Parliament. (PHOTO: Dhany Osman / Yahoo News Singapore)

SINGAPORE — Progress Singapore Party's (PSP) Non-Constituency MPs Leong Mun Wai and Hazel Poa sparked a 13.5 hour debate on the Singapore-India Comprehensive Economic Cooperation Agreement (CECA), free trade agreements (FTAs) and labour policies on Tuesday (14 September).

Their motion on foreign talent policy read: "That this Parliament calls upon the Government to take urgent and concrete action to address the widespread anxiety among Singaporeans on jobs and livelihoods caused by the foreign talent policy and the provisions on Movement of Natural Persons in some free trade agreements like the Comprehensive Economic Cooperation Agreement."

It was roundly voted down by both ruling People's Action Party and Workers' Party MPs.

Here's how and why CECA came to be the news this week.

The row over CECA

Signed in 2005, CECA is part of Singapore’s extensive network of 26 FTAs. It is the first comprehensive economic agreement between Singapore and a South Asian country. It is also India’s first comprehensive bilateral FTA with any country. 

According to the Ministry of Trade and Industry, Singapore's FTAs account for over 90 per cent of the country's export of goods and over 85 per cent of services export. As for CECA, from 2005 to 2019, Singapore's trade in good and services with India rose by 80 per cent while the stock of Singapore's direct investment in India increased 50-fold. And in 2019, there were 97,000 locals employed by Singapore-based companies that invested in India.

In recent years, CECA has attracted criticisms that the FTA supposedly accords Indian nationals special immigration privileges and enables them to compete for jobs in Singapore.

However, the government has argued that CECA does not automatically grant employment passes (EPs) to Indian nationals, and that they must meet the employment pass criteria applicable to all foreigners in order to work here.

Leong has consistently spoken against CECA in Parliament. In an interview with Yahoo News Singapore in July, PSP founder Tan Cheng Bock said, "I think to a large extent he was also influenced by my opening remarks when I wanted to form the party (a few years ago) and said one of the areas that we should really look into is this review (of) CECA, on our employment of PMETs."

Then in May, amid a number of racially motivated assault cases, which were condemned by both sides of the House, Minister for Home Affairs and Law K. Shanmugam issued a challenge to Leong to openly debate CECA.

"If anyone here believes that CECA is a problem, put it up for a motion debated openly, and let's hear whether Singaporeans benefit or lose from it," said Shanmugam.

"I'm looking at you, Mr Leong," he added. "I invite you to put up a motion to debate CECA. You know that most of what is said about CECA is false."

The next month, Leong accepted the challenge. In a Facebook post, the NCMP said his party believes Singapore is in need of rebalancing the interests of Singaporeans in relation to foreign PMETs in the job market. He noted the process could involve "the recouping of tens of thousands of jobs" from work pass holders through various measures.

While this would affect the number of PMETs in the Singapore workforce, it is a "necessary step" towards creating a "win-win situation for both Singaporeans and foreign nationals", Leong added.

"The first step in achieving this is obtaining prompt and complete information so as to promote transparency and to eliminate prejudices. All of which is in the spirit against xenophobia and racism," he said.

Ministerial statements

In July, Health Minister Ong Ye Kung and Manpower Minister Tan See Leng delivered separate Minister Statements on the issue.

Ong, a former trade negotiator, accused PSP of using FTAs and CECA as “political scapegoats” to discredit the government. He said the PSP has repeatedly alleged that CECA allows professionals from India “a free hand” to come and work in Singapore. 

The minister said, "Nothing in the agreement implies Singapore must unconditionally let in professionals, managers and executives (PMEs) from India...Contrary to PSP’s claim, our ability to impose requirements for immigration and work pass, has never been in question in CECA or any other FTA that we have signed."

Ong charged that, for months, the PSP has alleged that FTAs and CECA have led to the "unfettered inflow" of Indian professionals, displacing Singaporeans from their jobs, and bringing about all kinds of social ills.

"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."

In the process, said Ong, "toxic views" turned into verbal and physical assaults on Indians, including Singapore citizens.

Meanwhile, Dr Tan revealed certain official manpower data for the first time, such as workers from India accounting for a quarter all EP holders in Singapore.

"The proportion of EP holders from India has increased from about one seventh in 2005 to about a quarter in 2020," said Dr Tan, who did not give specific numbers. According to the Ministry of Manpower website, there were some 177,100 EP holders in Singapore as of December 2020. This does not account for S-Pass or work permit holders, as well as holders of other work passes.

The minister noted that by comparison, the proportion of EP holders from China has remained relatively stable across the same time period. "Now, is this the result of more favourable treatment for Indian EP holders due to CECA? The answer is no," he said.

He stressed that there is no differentiation based on nationality: all work pass holders in Singapore have to meet the same criteria before they are allowed to enter the local labour market. "Rather, these numbers reflect trends in the global demand and supply of tech talent."

Dr Tan explained that for foreign policy reasons, Singapore does not publish detailed statistics on its foreign workforce, especially by nationality. However, the government had decided to reveal some figures in order to allay the damage from "misconceptions".

He added that the top nationalities that comprise around two thirds of EP holders, has been consistent since 2005: China, India, Japan, Malaysia, Philippines, and the UK.

'Short-sighted' job proposals

On Tuesday, Leong gave proposals including increasing the qualifying salaries for EP and S-Pass holders to $10,000 and $4,500, respectively, in stages over the next three years, imposing a monthly levy of $1,200 on all EPs, and setting a 10 per cent single nationality cap in the workforce.

Dr Tan slammed Leong job proposals, saying that they would hurt the local workforce and Singapore’s attractiveness to investors. “It becomes clear that Mr Leong's policy can only make the environment so hostile that very few foreign investors will consider Singapore to build any business, maybe no foreign investor will consider,” he said.

Dr Tan, who is also Second Minister for Trade and Industry, criticised the PSP for continuing to equivocate about free trade agreements and workforce data, and claim that it does not have the relevant information.

He said that the Ministry of Manpower has been publishing workforce data regularly with a great degree of details. Among the official figures highlighted in the House, he added that over the past decade, while there was an increase of 110,000 EP and S-Pass holders, local PMETs increased by 300,000.

The number of PMET job vacancies across sectors has also been on an upward trend since 2010 and hovering around 30,000 over the past five years, Dr Tan said.

Many businesses and trade chambers have said that they are experiencing difficulties in finding enough local workers with the right skills, and this has hampered their expansion plans. Consequently, some business are giving up on Singapore and turning to hiring workers in their home country instead, said Dr Tan.

But he acknowledged that there is a minority of local PMETs who have lost jobs and the government has been focused on helping them to re-enter the workforce.

The PSP’s attacks on FTAs and foreigners have an adverse effect on business sentiment here and overseas, Dr Tan said.

“I worry that the PSP is calling for policies that are not only short-sighted but protectionist and this will do grave harm to Singaporeans.”

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