Health Minister Ong Ye Kung defended Singapore's strategy in pursuing Free Trade Agreements in general, and addressed falsehoods about the India-Singapore Comprehensive Economic Cooperation Agreement (CECA) in particular on July 6 in Parliament.
In a ministerial statement, Ong noted that it was perhaps unusual for a Health Minister to address trade policy, but cited his experience as a trade negotiator while he was a civil servant to explain his familiarity with the subject.
Ong also specifically called out the Progress Singapore Party (PSP) and its Non-Constituency Member of Parliament (NCMP) Leong Mun Wai on what he said were false allegations about CECA.
Ong addressed claims made by PSP
Ong noted that the PSP has repeatedly alleged that CECA gives Indian professionals a "free hand" to work in Singapore, and that Leong had claimed that the economic policies that most affected Singaporean Professionals, Managers and Executives (PMEs) were FTAs and CECA.
Ong said: "Mr Speaker, these statements are false. They have been repeated for too long... I feel I owe a duty to correct the falsehoods."
While Ong acknowledged that local PMEs had legitimate concerns over their jobs, he said that FTAs and CECA have been made into "political scapegoats" by the PSP.
Ong noted that the simplistic arguments have stirred up Singaporeans: "CECA-themed websites have sprouted, filled with quite disturbing xenophobic views about Indian immigrants. Words gradually became deeds, and toxic views turned into verbal and physical assaults on Indians, including our citizens."
He added: "Our FTAs in general, and CECA in particular, are not the causes of the challenges our PMEs face. If anything, they are part of the solution."
Singapore needs to embrace globalisation
Ong pointed out that Singapore has no natural resources, but has a "lasting advantage" of its geographical location. However, this requires work to utilise and sustain.
Over the years, Singapore has successfully captured trade flows through the Malacca Straits and built up its economy through the manufacturing and services sector, and a growing research and development sector.
Ong said: "Today, 50,000 international companies operate out of Singapore. 750 of them have made Singapore their regional headquarters."
Singapore has leveraged these advantages, including our skilled workforce, rule of law and clean government, to build up a network of FTAs with key economic partners like China, Japan, the U.S., India and the European Union.
How do FTAs help Singapore's economy?
Ong also elaborated on how FTAs are beneficial in the first place.
Ong pointed out that Singapore's trade in goods and services is three times its GDP. Since 2005, trade has nearly doubled from S$890 billion to S$1.5 trillion.
FTAs, therefore, help the economy in three main ways:
- Making it attractive for investors to invest in Singapore.
- Local SMEs are not constrained by our small domestic market, and gives them access to the world market.
- Local companies find it easier to expand overseas, thereby employing more Singaporeans.
Ong 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."
He added that the government could not have advanced the welfare of Singaporeans to the same extent today without FTAs.
Ong continued, saying that if someone attacks FTAs, they are "undermining the fundamentals of our existence", the sectors the FTAs support and the hundreds of thousands of Singaporeans working in those sectors.
How do FTAs work?
Ong laid out the details of how an FTA works.
Firstly, it obliges both partners to remove tariffs (taxes on goods imported from other countries), or at least lower them, for a substantial amount of trade goods.
This helps Singapore because we are already open for trade and only impose tariffs on just three items -- beer, stout and another alcoholic drink called samsu.
Therefore, it costs Singapore very little to lower our tariffs, while our trade partner may be obliged to give up more by lowering their tariffs.
FTAs also require governments to protect foreign investments, ensure fair regulation on both local and foreign firms, and set standards on intellectual property protections.
Since Singapore already practises these to attract foreign investors, it's easy to abide by the requirements of an FTA.
New FTAs may also set environmental and labour standards, which are becoming bigger concerns. Taken together, FTAs encourage local firms to venture overseas, under the protections an FTA affords.
Controversies involving FTAs
However, Ong also acknowledged that FTAs may arouse certain controversies.
Ong detailed that in his experience, he encountered countries who wanted to protect their local sectors such as agriculture, or cannot match up to the intellectual property protection standards that Singapore expects.
While some of these "exceptions" or "carve-outs" may be tough to negotiate, others are easier to settle, because both sides agree on their importance.
Ong mentioned immigration, saying that every country agrees that there cannot be unfettered movement of people across borders. Therefore, each FTA and WTO agreement strongly protects immigration powers, including CECA.
CECA's advantages for Singapore
Ong then specifically addressed CECA.
It was signed in 2005, just when India was emerging as an economic powerhouse, thereby giving Singapore a "first-mover advantage". It was India's first bilateral, comprehensive FTA with any country.
As mentioned above, CECA reduces tariff barriers, making Singapore goods more competitive in India's markets. Because of this, bilateral trade has grown over 80 per cent, from S$20 billion in 2005 to S$38 billion in 2019.
Singaporean companies have increased investment in India, from S$1.3 billion to S$61 billion in the same period. Because of their expansion, they hire more people in Singapore, employing 97,000 locals in 2019.
Ong: Addressing falsehoods about CECA
Ong then addressed the "falsehoods" about the immigration-related parts of CECA.
Chapter 9 makes it clear that the government’s ability to regulate immigration and foreign manpower is not affected by the Agreement. The government retains full rights to decide who can enter the country to live, work or become PRs or citizens.
Ong remarked that it is hard to miss these clauses, as they are on the first page of Chapter 9. The full text of the agreement is also available online.
Ong then said that unlike what the PSP claims, there is a strong immigration carve-out in CECA.
A National Treatment principle, which would have allowed Indian PMEs to be treated as Singaporeans, is not included in Chapter 9 of CECA, nor any other FTAs that Singapore has signed.
"I emphasise and underline and highlight, and bold in bigger font, to colour it, that nothing in the agreement implies that Singapore must unconditionally let in 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."
What obligations does CECA have instead?
Ong then dived deeper into the obligations that are indeed present in Chapter 9 of CECA.
It includes an obligation to expedite the processing of some applications for temporary entry, and being transparent about it with the applicants so as not to leave them hanging.
It also obliges Singapore to accord a certain duration for the validity of Work Passes, but this is subject to applications meeting the requirements. It is also not unique, as such a commitment may be found in other FTAs and the WTO Agreement signed by 164 countries.
And it does not impose labour market tests, allowing companies to hire who they deem are the best people for the job.
Ong addressed claims about "Movement of Natural Persons" in CECA
Ong then specifically addressed two claims about the chapter of "Movement of Natural Persons" in CECA, which has been "singled out for criticism."
First, there is a list of 127 categories of professionals. Ong said PSP claimed this meant that Indian nationals in these professions can freely come to Singapore to work for a year. He said this is false, as the applicants still need to meet the requirements for Work Passes.
While the list defines who may apply to work in Singapore, Singapore is not obliged to approve all such applications.
"Thus, the point being made by PSP on the list of 127 professions is a red herring -- the list does not confer any free pass to any Indian nationals," Ong said.
Secondly, Ong addressed complaints that intra-corporate transferees can freely come to work in Singapore.
Again, this is false as they will need to meet requirements for a Work Pass. Ong also shared that in any case, the number of such transferees is very small, only 500 in 2020, which made up 0.3 per cent of all EP holders.
Ong said he hoped this could put a stop to misinformation about FTAs in general, and CECA in particular.
Ong's remarks in Chinese
Ong reiterated the points he made in English for the Chinese portion of his speech, saying that he understands the pressure that PMETs face at work, such as being replaced by professionals from overseas, or feeling unease about the number of foreign professionals hired by their companies.
Ong acknowledged that many citizens and MPs have given their feedback to the government on this issue. He reassured Singaporeans that the government is seriously looking into their concerns, and cited several measures that have already been taken to tackle the problem.
For instance, the work pass criteria for foreign professionals has been raised, and employers who discriminate against locals have been more severely dealt with, he said.
Ong: The PSP has politicised CECA
Ong claimed that the PSP did not investigate the matter thoroughly, and yet insisted that CECA is the ultimate cause of the problem.
"They say that this agreement allows an influx of Indian nationals into Singapore indiscriminately, stealing jobs from the locals, destroying Singapore’s economy and the interests of Singaporeans," Ong said.
"Unfortunately, they have politicised the FTA and used it as a weapon to attack the government."
Ong added that the PSP is completely inaccurate on the matter, and has twisted the facts.
"These sort of talking points have aggravated the sense of xenophobia among a certain group of our people," he said, before listing points he said he had a duty to clarify.
Ong repeated his earlier points in English, explaining how Singapore's economy relies on FTAs to thrive, and how it protects and encourages investment in Singapore and expansion of business activities overseas.
What did the PSP get wrong?
"They have twisted the intentions of the FTA, misrepresented the efforts of our negotiating team, and wronged us.
They claim that CECA allows 127 different categories of professionals in India to freely come to Singapore to live and work. This is ridiculous."
He said again that the listing of categories indicates the types of professionals who may apply to work in Singapore, and that it does not mean the government must approve them.
Ong further asserted that in all of Singapore’s FTAs, policies regarding immigrants and foreign talents have remained unchanged.
"Those who can enter Singapore, those who can get their work passes, those who can become permanent residents or citizens, these are completely up to the government to decide," he said.
So where is the pressure facing our local PMETs coming from?
Ong said: "Simply put, these pressures come from the competition arising from the global economy."
He added that on one hand, the country has to open up to create opportunities for its people, and on the other, it has to deal with the competition that comes as a result.
"We’ve opened the window, and both sunshine and flies have come in," he said, referring to jobs for locals and the competition that arises, and not to any particular group of people.
However, Ong stressed that competition from overseas is not completely a zero-sum game.
He explained that a decrease in numbers of foreign professionals that come into the country does not necessarily mean that locals will have more opportunities at work.
“Conversely, both locals and foreign professionals are able to complement one another, attract even more foreign investments, and create more and better employment opportunities,” he said.
Ong continued, “As a small country that is dependent on the global economy, we are faced with the following choices:
- More competition, many jobs; or
- Little competition, fewer jobs?
What Singapore wants is neither of the two extremes, Ong said, adding that a balance between the two is what the country is looking for.
"To ensure that Singaporeans have sufficient good jobs, some competition is unavoidable."
He added: "If someone promises you that they can give you an economic model that has no competition at all, with many job opportunities, that person is definitely talking big and making ridiculous claims."
Ong also said Singapore is facing the challenge of developing the field of digital information technology, which is currently dominated by professionals from China and India.
While Chinese professionals tend to stay in China, Indian professionals tend to look outwards for opportunities, he said, which explains why there are relatively more Indian nationals in the digital sector.
In addition, Ong said that while it’s important to continue the discussions on resolving the issue, assuring Singaporeans of their employment prospects, and allowing them to do well under an environment of fair competition, he cautioned people to not be taken in by falsehoods regarding FTAs and CECA, so as to protect Singapore’s foundation that its open economy is based on.
Lastly, he said Singapore must not allow xenophobia and nativist politics to take root in the country.
CECA falsehoods xenophobia
Switching back to English, Ong repeated that it was important to tackle xenophobia.
While he acknowledged that globalisation does bring about displacement of some workers, and such concerns are genuine, this must not be exploited for political purposes, which may lead to stoking fear and hatred, whether intentionally or not.
"As representatives of the people, we all have a responsibility to realise that our words and deeds can shape public opinion and the direction of our political discourse," Ong said.
He cited Leong's comment that it was a failure not to have a home grown CEO of DBS bank, even though the CEO is a naturalised Singaporean.
He said members of the House should not give credence to such ugly views, and praised Leader of the Opposition, Pritam Singh of the Workers' Party, who said there can be no "ifs or buts" about rejecting xenophobia and racism.
Top image from MCI's YouTube channel.