What exactly is CECA? And why is it such a highly debated topic?

Every now and then, the topic of Free Trade Agreements (FTAs), specifically the India-Singapore Comprehensive Economic Cooperation Agreement (CECA), would always get thrust into the spotlight.

Many have tried to explain it, including Mothership and Professor Tommy Koh, who wrote an article for the Straits Times.

However, it seems that people still get extremely fired up at the acronym without really understanding it. So here we are, attempting to demystify it as much as possible.

So, what exactly is 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.

Like other free-trade agreements (FTAs) that Singapore signs with other countries, CECA allowed for tariff reductions and eliminations, as well as improved market access between India and Singapore.

Why do we need FTAs, or CECA, for that matter?

This is because Singapore is a small country with a very small market size and no natural resources. We depend heavily on trade and investment. With FTAs, these treaties make trade and investment between two or more economies easier.

In case you didn’t know, together, these 26 FTAs have yielded $1.5 trillion of trade (three times our GDP growth) for a country of 5.6 million people.

And between 2005 to 2019, CECA alone was accountable for Singapore’s trade in goods and services with India which rose by 80 percent, while the stock of Singapore’s direct investment in India increased 50-fold. Additionally, in 2019, there were 97,000 locals employed by Singapore-based companies that invested in India.

Therefore, it is non-debatable that FTAs are existential to Singapore.

If FTAs, including CECA, are crucial to Singapore, then what’s the beef?

In recent years, CECA has garnered criticisms that the FTA brings in Indian nationals who take away Singaporeans’ jobs while granting them special immigration privileges.

While CECA does grants guaranteed entry and stay in each other’s countries when Singapore and Indian citizens and permanent residents travel for specific purposes, it is important to note that the guarantee of entry does not apply to citizenship, residence, or permanent employment. Individuals entering Singapore will still need to apply for and be granted with a valid visa.

In other words, CECA does not automatically grant employment passes (EPs) to Indian nationals. In fact, the government has reiterated that all foreigners, including those from India, must meet the criteria for their work pass before they are allowed to work in Singapore.

In theory, yes, CECA sound perfectly reasonable, and we understand the need for it.

However, the stories we’ve heard from the ground, the observations on how some industries were dominated by a single nationality of foreign workers which led to the term “Chennai Business Park” being invented, surely there must be loopholes somewhere right?

The Concerns of the local workforce are legitimate

In his National Day Rally speech, PM Lee said,

“Of course, not every company plays ball. A few have not been fair employers. They hire from their own countries, using familiar links and old boys’ networks, rather than on merit. And they give foreigners the jobs and opportunities, and only make token gestures with locals. That naturally causes problems.”

Not sure about you, but it seems to me that PM Lee understands, and he acknowledges the concerns of Singaporeans. Therefore, during the National Day Rally, PM Lee announced that the government has decided to legislate the Tripartite Alliance for Fair & Progressive Employment Practices (TAFEP) guidelines, giving more teeth and bite when it comes to dealing with workplace discrimination – and hence giving Singaporeans better protection.

This move to enshrine the TAFEP guidelines in law is in response to the repeated requests made by the Labour Movement and NTUC MPs who have pushed for anti-discrimination laws that carry penalties, said PM Lee.

Protecting Singaporean Core

NTUC Assistant Secretary-General Patrick Tay, who has been a strong advocate of strengthening the Singaporean Core, echoes the sentiment and concerns of the local workforce and believes that they should not be ignored.

This is especially so after the NTUC-SNEF PME taskforce engagements, through which NTUC has gathered sentiments on the issues and challenges faced by more than 9,000 Singaporean PMEs.

Their concerns? The lack of job security amidst this outlook, and they need more support in employment and training opportunities.

Mr Tay and his fellow Labour MPs have spoken inside and outside of Parliament on the matter over the past decade. He also made three proposals for MOM, aimed at addressing fairness and localisation of PME jobs.

His first suggestion was that fair hiring practices could be enhanced by strengthening enforcement and imposing stiffer penalties for companies with discriminatory hiring practices.

Second, he proposed enhancing the Employment Pass application process by moving beyond looking at individual applicant’s educational qualifications and salaries, paying closer watch to sectors with imbalances of foreign-to-local manpower numbers.

And third, Singapore needs to ensure that locals have fair access to PME roles and progression opportunities to improve localisation of jobs in high-growth sectors.

In a recent Facebook post, NTUC Secretary-General Mr Ng Chee Meng also shared that NTUC will continue to fight for workers and protect them against any unfairness.

He also promised that NTUC will continue to ask probing questions in Parliament through our Labour MPs and partner employers, and push when necessary, to make sure that they are giving our workers a fair deal.

What do PMES really think of globalisation? We surveyed 500 PMEs and here are the results!

About Author

Editing is my work.