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CECA, 2 common myths about CECA that causes a big hoo-ha

2 common myths about CECA that causes a big hoo-ha

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CECA has been an oft-used word in the FB comments section of news particularly pertaining to Indian nationals. It has also become synonymous with people’s critique of the Government and the supposed “free flow” influx of Indian nationals to Singapore. So, what exactly is CECA and why does it cause such contention?

What is CECA? 

The India–Singapore Comprehensive Economic Cooperation Agreement (CECA), is a free trade agreement between Singapore and India to strengthen bilateral trade. It was signed on 29 June 2005.

#1 Myth: CECA grants Indian nationals unconditional access to Singapore and immigration privileges

It is false that CECA gives Indian nationals the right to take up citizenship or permanent residency.

In Chapter 9 of the agreement on movement of natural persons, Article 9.1.2 states: “This Chapter shall not apply to measures pertaining to citizenship, permanent residence, or employment on a permanent basis.”

This means that the agreement does not automatically guarantee Indian nationals an Employment Pass (EP) to Singapore. Like other foreigners who work in Singapore, they have to meet prevailing EP criteria, such as minimum salary thresholds. The minimum salary for EP holders was also recently increased to S$4,500.

#2 Myth: CECA does not benefit Singaporeans

The Government allows CECA because it benefits Singapore and Singaporeans.

Before CECA and the Free Trade Agreement (FTA) were in place, there were only 370 Singapore companies in India. By allowing the FTA, our Government allows Singapore’s companies to go global into India more easily. This allows Singapore’s companies to tap into the Indian market, which benefits us. As of 2019, there are 660 Singapore companies in India which in turn employ about 97,000 Singapore PMEs.

CECA benefits Singaporeans by creating more jobs

CECA, 2 common myths about CECA that causes a big hoo-ha

The number of EP holders has increased, from 65,000 in 2005 to 177,000 in 2020 – an increase over 15 years of 112,000 or an annual growth rate of just under 7 per cent.

Over this period, however, the increase in number of local PMEs increased is much higher, by over 380,000. So, 380,000 for local PMEs and 112,000 for EP holders. This means that it is a win-win situation for Singapore as there is a greater increase of jobs for Singaporeans.

Not only is it easier for our companies to go into India for expansion, having foreign PMEs in Singapore creates more good jobs for Singaporeans.

As evident through COVID, these foreign PMEs also act as a buffer in our economy. By working here when the market is good, they help us grow our businesses and economy. However, when something like a pandemic happens, they are often the first to go as the Government prioritises the Singaporean core.

For the 12 months to April 2021, there was a 26,800 decrease in S Pass holders and 21,600 fewer EP holders in 2020.  On the other hand, local employment has been stable. Unemployment rate for local PMEs in June 2020 – despite this is immediately after the “circuit breaker” – was at 2.9 per cent.

Political potshots taken at the expense of Singapore’s success

CECA

Aside from CECA, Singapore has 26 Free Trade Agreements (FTA) with many countries globally. Since 2005, our total trade in goods and services has nearly doubled from around S$890 billion to S$1.5 trillion (which is three times of our GDP!). Those who attack CECA without proof are synonymously attacking Singapore’s success and the direct livelihoods and jobs of Singaporeans to earn political votes.

Singapore’s success was not built overnight. We’re a small red dot on the map and have to constantly jostle to maintain our place in the world. We are nothing but a dust speck in the global arena if it weren’t for our success. Let’s not forget how precarious our position is nor be swayed by the baseless comments of netizens online.

Read also  Free trade agreements open doors to better jobs for Singaporeans, says Heng Swee Keat
Read also  What the legal text of CECA say of intra-corporate transferees
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