FTA Negotiations: A Black Box?

by singaporearmchaircritic

At the time of writing, Taiwan students have occupied their legislature for 14 days; on Sunday 30 March, hundreds of thousands flocked to the streets of Taipei in support of the Sunflower Movement led by students (see photos here). Citizens have also crowdfunded full-page advertisements (see image below) in the International New York Times.

1396043401_4AM Democracy artwork-final 530x337 due

Source: http://4am.tw/we-need-your-support/

What triggered the movement was the ruling party Kuomintang’s (KMT) attempt to unilaterally ratify a service trade agreement with mainland China, breaking its earlier promise to allow a parliamentary review of the agreement. Fearing that the trade pact would increase Taiwan’s economic dependence on China, whose ultimate aim is to “reunify” Taiwan as part of its territory, students have demanded that President Ma Ying-jeou retract the trade pact and introduce a mechanism to monitor the nation’s agreements with China.

Democracy to be Blamed?

Detractors of democracy saw in Taiwan’s conflicts yet another excellent opportunity to point fingers at the liberal political system.

Yet if we look at the way this cross-strait service trade agreement was negotiated, we can see that the conflicts have arisen from flawed democratic procedures. The problem is not too much democracy, but a lack of adherence and respect for democratic procedures.

In resorting to all sorts of antics to block opposition legislators’ review of the trade accord and pass the trade pact, KMT legislators have flagrantly flouted parliamentary procedures and angered the public, sparking the Sunflower Movement on 18 March 2014.

Furthermore, prior to the signing of the trade agreement, the government had engaged the public in a perfunctory manner. Although President Ma said that there had been 20 public hearings and 110 meetings with over 200 industry representatives before the deal was sealed, critics pointed out that KMT legislators had deliberately timed and arranged the hearings so that non-industry representatives such as students could not attend the sessions. The Ministry of Economic Affairs also admitted that there had been little communication with the general public other than industry representatives.

The deficiencies and immaturity of Taiwan’s young democracy notwithstanding, there is reason for optimism when we look at how its government has responded to dissension.

Although President Ma, citing Taiwan’s economic survival, is determined to get the trade pact ratified, he has made some concessions: he has agreed to allow parliament to review the controversial trade accord and has urged lawmakers to speed up the introduction of the oversight mechanism, which may be ready in a matter of days.

In addition, the Ministry of Economic Affairs said it is open to the idea of a debate on the trade agreement and has planned to explain the pact to students in universities. Taiwan’s Mainland Affairs Council has also clarified that the public’s concerns may be addressed in an annex to the agreement. In a press statement, the Council said:

…Considering the high degree of concern of various groups over the monitoring of cross-strait agreements and the possible impact on national security, it is necessary to enhance public understanding of the negotiation process and content though more open and transparent procedures. The administrative departments have recently established a “four-stage public communication and consultation mechanism” and a “national security review mechanism” in order to monitor the negotiation of cross-strait agreements. This shall be achieved through the strengthening of communication and consultation with the legislature and the public during issue formation, at industry meetings, and before and after the signing of the agreement.

The episode of social discord, which many are quick to disparage as “chaos” or “messy politics,” is likely to culminate in greater openness and transparency, especially in Taiwan’s dealings with China. Democratization is an ongoing process, and Taiwan may emerge from this baptism of fire a stronger and better democracy.

No Public Consultation in our FTA Negotiations?

The Taiwan incident has thrown light on the role of the public in the negotiation of Free Trade Agreements (FTAs). The Australian government has even published a guide to FTA negotiations, in which it highlighted the importance of engaging the society ahead of negotiations:

What to do before the negotiations begin? Preparing well for the negotiations makes the actual negotiations a more manageable undertaking. This is the time to work out the negotiating objectives. It is also the time to identify, both at home and in the partner economy, businesses, industry associations and other nongovernment organisations, such as consumer bodies, that may have an interest in the agreement and to seek their views on what it should contain. Their support later in the negotiations will become very important (emphasis mine).

Relate this to Singapore and it seems that our FTA negotiations are largely conducted in a black box.

Take the Singapore-India Comprehensive Economic Cooperation Agreement (CECA) for example.

Last year, India’s displeasure over Singapore’s alleged violation of the terms of agreement prompted online commentators to scrutinize the agreement. It then came to light that CECA, signed in 2005, permits the free movement of skilled Indian personnel from more than 100 professions – including IT professionals, university and polytechnic lecturers, chartered accountants, financial analysts, fund managers, advertising account executives, market research analysts, town planners, architects, engineers, dentists and doctors – into Singapore.

It was revealed by one of the negotiators that the initial list given by India “demanded unrestricted entry to even electricians and plumbers” (“The inside story on how S’pore-India free trade deal was struck,” Straits Times, 2 July 2005).

If not for the widespread unhappiness over Singapore’s overly liberal immigration policy expressed in the landmark protest against the Population White Paper at Hong Lim Park, the PAP government would not be pressured to tighten the spigot and slow down the influx of foreigners to Singapore.

And without this “calibration” of policy that has upset India, Singaporeans may still be kept in the dark about the free movement of Indian personnels into Singapore endorsed by CECA and how this may jeopardize our job opportunities in the local market.

An excerpt from a news report dated 2005 already gives a hint of how excessive the free flow of Indian personnels would become a few years down the road:

The city of 4.2 million people already has 90,000 expatriate Indians. The Indian MBA pool has contributed a lot to Singapore’s financial services industry, which accounts for 11 per cent of Singapore’s US$107-billion gross domestic product.

Take the Indian Institute of Management in Kolkata and its class of 1993. Among that year’s graduates, Mr Vinod Aachi is the managing director of the relative-value group, which straddles all aspects of the credit market, at Deutsche Bank. Mr Ashutosh Sinha, a managing director at Morgan Stanley, manages US$9 billion in Asian equity investments outside of Japan. Mr Manish Singhai has the same role at Alliance Capital Management, where he is the chief investment officer for the region. Mr Jai Rajpal heads Asian non-deliverable currency forward and options trading in the same company. Mr Vijay Sivaraman works for Citigroup’s retail banking unit. All five live in Singapore’s up-market Orchard Road/Grange Road neighbourhood. Two other former classmates, now in London, will soon be joining the group.

 “Out of our class of 110, we have more than 15 in Singapore, many in the same industry, living in the same neighbourhood,” says Morgan Stanley’s Mr Sinha.

 “This is when 40 of us had started our careers in Mumbai, where only a few now remain. It’s incredible.” (“S’pore may tap India for doctors; Talent flow expected after the signing of economic accord next week will benefit both countries,” Today, 25 June 2005)

Browsing through media reports on CECA mostly published in the Business Times, there is no mention of any apparent efforts to engage, educate, or consult the general public other than the business sector on this trade agreement that has significant and far reaching impact on Singaporeans’ livelihood (“The inside story on how S’pore-India free trade deal was struck,” Straits Times, 2 July 2005).

At the initial stage before the negotiations kicked off, a 10-member India-Singapore to joint study group was formed to look into the scope and structure of CECA. The panel was co-led by the adviser to the Indian Finance Minister, and a former Singapore ambassador to Japan, with members from the ministries of Foreign Affairs, Commerce and Finance, and from business and academia (“India-S’pore panel to study closer ties,” Business Times Singapore, 15 May 2002).

After the pact was inked, a guidebook was published to give an overview of “the benefits Singapore companies can get in different areas such as trade in goods, property, technology and education exchanges, among others.” An online feedback  portal was also set up “to understand better the issues faced by companies when trying to make use of the trade agreement” (“Smoothing the passage to India via the Ceca; Guidebook launched to help businesses understand accord,” Today, 10 February 2006).

The entire process before and after negotiations, therefore, appears to be an elite-only affair addressing only the interests of businesses. It saddens me to see the stark contrast in the procedures in Taiwan and those in our country, and how far we lag behind in the openness and transparency of policy making.

Will our future FTAs also be negotiated in a black box? In talks over trade agreements, will the pro-business PAP ever take into consideration the concerns and interests of ordinary Singaporeans? How can we citizens make ourselves heard?

(This blogpost first appeared on The Online Citizen)