The Comprehensive Economic Cooperation Agreement (CECA) between Singapore and India has been thrust back into the limelight, in the wake of the viral video showing an Indian J.P. Morgan employee berating Singaporean workers.
On Friday night (25 Oct), a video of a man verbally abusing a hapless security officer went viral on social media. In the incident, which reportedly took place at the Eight Riversuites condominium in Bendemeer, the man hurled vulgarities at the elderly guard after being told that guests visiting his condominium unit needed to pay parking fees.
Despite the security guards’ explanation that they are simply enforcing the rules, the condo resident continued to berate the workers. In his expletive-ridden rant, the man bragged to the security officers that he bought his condominium unit for S$1.5 million. He exclaimed: “I buy your f****** property for S$1.5 million you know.”
Netizens subsequently identified the condo resident as Ramesh Erramalli, a foreign talent from India who works at global financial services company J.P. Morgan in Singapore. The incident drew swift backlash and many Singaporeans are calling on J.P. Morgan to sack Ramesh and have him deported back to India.
The incident has also led many Singaporeans to criticise the CECA agreement. Progress Singapore Party chief Tan Cheng Bock’s promise that he will call for a review of CECA and Workers’ Party politician Gerald Giam’s exchange with former Trade and Industry Minister Lim Hng Kiang is trending on social media, after the video went viral.
In Oct 2014, Mr Giam – who was then a Non-Constituency Member of Parliament (NCMP) asked the Mr Lim if he will provide an update on the CECA negotiations and, specifically, whether India is entitled to special access to Singapore’s labour market or banking licences under the terms of CECA.
Mr Giam re-produced the exchange on Facebook on Tuesday (29 Oct):
The Minister for Trade and Industry (Mr Lim Hng Kiang): Mdm Speaker, the India-Singapore Comprehensive Economic Cooperation Agreement (CECA) entered into force on 1 August 2005. CECA provides for reviews to examine issues related to the Agreement. The first review was completed in 2007 and the second review is on-going.
CECA has increased trade and investment flows between India and Singapore. Bilateral trade grew from S$16.6 billion in 2005 to S$25.5 billion in 2013. Foreign Direct Investment (FDI) from India into Singapore grew from S$1.3 billion in 2005 to S$20 billion in 2012. This has helped to create good jobs for Singaporeans.
CECA serves to bring conveniences to businesses by allowing temporary entry on both sides for certain categories of persons, including business visitors, professionals, and Intra-Corporate Transferees.
Under CECA, Singapore agreed to grant three bank licences with Qualifying Full Bank (QFB) privileges to Indian banks, subject to the prudential requirements of the Monetary Authority of Singapore (MAS). Two Indian QFBs, namely State Bank of India and ICICI Bank, have been approved to date. At the same time, India agreed to allow the three Singapore banks to open a total of 15 bank branches in India and 11 branches have been approved so far.
Mr Gerald Giam Yean Song (Non-Constituency Member): I have two supplementary questions, Madam. I understand that India is claiming that our Work Pass framework, which has been tightened in recent years, somehow violates CECA, or they are saying that they are entitled to allow more workers to come in here. So, can the Minister share with us his interpretation of what India’s claims are?
Secondly, can the Minister also share Ministry of Trade and Industry (MTI)’s position on this, and also give us an assurance that the Government will stand up to pressure from the Indians to allow more of their nationals to work here?
Mr Lim Hng Kiang: Under the Free Trade Agreements (FTAs) that we negotiated, there is an exchange of preferential treatment. In India’s case, in CECA’s case, one of the privileges we extend to India was to create greater conveniences for business people to move between the two countries, Singaporean businessmen to India, and vice versa.
One category is Intra-Corporate Transferees. That means if you got employees that you have employed and you are setting up a business in Singapore, we facilitate the transfer of your corporate employees to help you set up and run the business.
Under the General Agreement on Trade in Services (GATS) in World Trade Organization (WTO), we grant such Intra-Corporate Transferees, say five years. In India’s case, we allow them to do so for eight years. These are the kind of privileges.
All these privileges do not deviate from our right to apply measures to regulate the entry as well as a temporary stay. So, the overall immigration and employment rules that we regulate have to be maintained. But where the special privileges are negotiated in the FTA, then, of course, the counter-party will enjoy those privileges. And we will follow these rules strictly.
Mr Gerald Giam Yean Song: Madam, I understand the point about the privileges. My question is, are we granting them all the privileges that they are entitled to under the CECA, or are they saying that we are not granting them enough? If it is the latter, would that mean that, effectively, the Indians are asking for more Work Passes for themselves?
Mr Lim Hng Kiang: The privileges are clearly delineated in the FTAs and in CECA. As I had explained just now, say, for example, Intra-Corporate Transferees, if the Indians dispute that we are not giving them eight years as we agreed, then they can refer the case to us and, ultimately, there is a dispute settlement process.
Signed in 2005 by then-newly minted Prime Minister Lee Hsien Loong, CECA was negotiated by current Deputy Prime Minister Heng Swee Keat, who is expected to take over leadership of the ruling party from PM Lee following the next election.
PM Lee’s predecessor, Goh Chok Tong, bragged last year that he has been credited with starting the “India fever” since he’s been promoting India-Singapore business relations since the 1990s. His admission has led some to believe that Mr Goh may have been one of the key figures pushing a bilateral free-trade agreement with India during his premiership.
The bilateral free-trade agreement has been controversial among locals since it opens the floodgates for Indian nationals to migrate here and compete for jobs with Singaporeans with greater ease. Many locals see this clause as unfair since Singaporeans are less likely to migrate to India in return.
In the agreement, Chapter 9 provides for the movement of people between the 2 countries. In particular, it provides very laxed rules for the so-called “intra-corporate transfer” of employees from 127 sectors. These employees shall be exempted from any labour market testing or economic needs testing, as specified in Article 9.3.
To top it all off, CECA Article 9.6 even allows the “intra-corporate transferees” to bring in their spouses or dependents to work too. In cases where their spouses or dependents are not professionals, they shall be allowed to work in other areas.
CECA led Indian IT companies like Wipro or Infosys to exploit the “intra-corporate transfer” loophole and move a large number of Indian IT workers into Singapore since CECA does not set any quotas and since they do not have to hire a single Singaporean in their Singapore-based subsidiaries.
When unemployment rates for Singaporean PMETs climbed and when Singaporean workers began to complain of discriminatory hiring practices at such firms, the Government responded and began to slow down the approvals of Indian IT professionals to work here.
This did not sit well with the Indian Government.
Times of India reported that work visas for Indian IT professionals to work in Singapore have dropped “to a trickle”, prompting the Indian government to put on hold the review of CECA, citing violation of the trade pact.
In particular, the Indian Government was against Singapore using our “fair consideration framework” to regulate the employment of foreigners in Singapore. “They are doing it despite the CECA clearly stating that there will be no ENT (economic needs test) or quotas on agreed services. This is a violation of the agreement,” warned an Indian official.
That was in 2017. In 2018, Singapore and India successfully concluded the second review of the CECA in the presence of PM Lee and his Indian counterpart Narendra Modi.
The second review of CECA was concluded with no change to the chapter on movement of people and was instead expanded to officially recognise Indian nursing degrees and includes tariff concessions for more products. -/TISG