The Interplay Between Gov’s Foreign Talent Policy and Free Trade Agreements

The Foreign Talent Policy arrived on the scene in the late 1990s following the Asian Currency Crisis. Singaporeans at large did not react negatively to it initially because we are basically industrious and pragmatic and ascribe to learning from others. What more if they are global talent that can help us advance in a knowledge-based economy.

Singaporeans accepted the foreign talent policy without much concern although there was no clear framework to it. This policy was never defined nor debated in Parliament until much later when the Population White Paper was released in 2013, almost as an afterthought.

However, the foreign talent policy turned out to be a conduit for quick immigration and a source of cheap labour. Foreign PMETs were hired on relatively low qualifying salaries for both the Employment Pass (EP) and S-Pass (SP) holders. The SP was introduced in 2004 at a qualifying salary of $1,800, raised to $2,200 in 2013 and stayed at that level until 2019. It is currently set at $2,500. The qualifying salary for EP was only slightly higher than for SP by about $1,000 for most of the years until the more sizeable increase in Sep 2020 to $4,500 ($5,000 for the finance sector), a gap of $2,000 from the SP.

By the time the Population White Paper was released in 2013, our population had grown by 40% since the late 1990s. At its immigration peak, 80,000 PRs were given out in 2008 before declining to the present 30,000 a year.

To rein in the rampant foreign PMET increase, the Fair Consideration Framework (FCF) was started in 2014 as a form of labour market testing. In labour market nomenclature, giving hiring priority to Singaporeans before a job can be given to a foreigner is called labour market testing. However, Singaporeans have voiced overwhelmingly that the FCF is not effective. One of the main reasons is that it is not even legislated by law.

It is also puzzling why FCF was only put in place more than fifteen years after the foreign PMETs started to swarm into our country. To give job preference to Singaporean workers did not appear to be a priority for the Government before 2014.

Furthermore, labour marketing testing has been waived for some free trade agreements (FTAs). For example, Article 9.3(3) of CECA states that: “Neither Party shall require labour market testing, economic needs testing or other procedures of similar effects as a condition for temporary entry in respect of natural persons upon whom the benefits of this Chapter are conferred.” As a result, the intra-corporate transferees of CECA are exempted from the FCF requirement.

Singapore started to seek after free trade agreements (FTAs) proactively about the same time as we started the foreign talent policy. We support FTAs wholeheartedly when it should involve only trade and investment. The problem arises when the new FTAs contain onerous provisions for the “movement of natural persons”. Some of these provisions provide for longer term stay for intra-corporate transferees and their dependents. This could serve as a means for easy access into our job market although according to the Government, the number of intra-corporate transferees is not large.

However, the interplay of the Foreign Talent Policy and FTAs through the waiver of labour market testing and the general goodwill between the two countries, do provide a loose arrangement for foreign PMETs to seek employment in our job market.

It is our sovereign right to address and reverse this anomalous trend that has disadvantaged Singaporeans for too many years. Hence the #PSPJobsDebate.

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