Free Trade Agreements are not about freeing up trade

Contrary to its name, Free Trade Agreements (FTAs) are not about freeing up trade.

Prior to the signing of the United States – Singapore Free Trade Agreement (USSFTA) in 2003, Singapore imposed tariffs on only three products – beer, stout and samsoo.

Trade was already free.

Why then would the Americans want to sign a Free Trade Agreement with us?

To be more precise, Free Trade Agreements are actually, Investor Rights Agreements. Their main purpose is to protect the profits of foreign investors.

The game is to open the country up for mutual investment. In this case, US companies will invest in Singapore and Singapore companies will invest in the US.

Naturally, each country will try to protect its politically and economically sensitive entities before opening itself for competition. Nonetheless, some segments of society will win, and some will lose. (Usually, the rich will win and the poor will lose).

Nonetheless, both the Singapore and US governments were very pleased when the USSFTA was signed.

For Singapore, it gained enhanced access to a huge market. In addition, a very high ranking member of the Singapore negotiating team emphasized that the USSFTA “enhanced the prospects of peace and stability in the region because the US underpins security for the whole of Asia-Pacific”. (Is not the US currently forming alliances to encircle China, provoking a major war in our backyard?)

For the US, it was its first FTA with an Asian country and was a “high quality” treaty in terms of protection for investors. It hoped that other countries would follow suit using the USSFTA as a template.

But twenty years on, only its staunch allies in the region have signed an FTA with them – Australia, S. Korea and Japan.

The negotiations with Malaysia and Thailand did not succeed because large sections of poor people would be adversely affected and the governments could not force the deals over their heads when the people got wind of them.

The other countries noted that the US is a far bigger political and economic power, and any bilateral trade negotiation would be unequal. Instead, they have opted for multilateral negotiations via the World Trade Organization (WTO).

The USSFTA protects, even enhances, the profits of American companies by various ways:

- having the government enforce extended patents, copyrights and prohibit parallel imports, thus pushing prices up.
- allows an unlimited number of American professionals to work here so long as they meet customs and employment criteria (But only 5400 Singapore professionals can enter the US market per year via this route).
- claims to uphold high labour standards but implicitly encourages otherwise.
- grants American companies the power to sue the government if they deem their profits compromised by domestic policies.
- restricts the government’s control of speculative capital seeking arbitrage gains, wrecking havoc on asset prices.

Of course, Singapore companies, including Temasek and GIC linked companies, enjoy reciprocal benefits in America.

The USSFTA set the benchmark for protection of investors in Singapore. Since then, more than 20 FTAs have been signed with many other countries, including Australia, Japan, Korea, India, the EU, UK, China. Our laws have been amended to enforce protection for foreign MNCs, affecting the lives of all Singaporeans.

FTAs have their advantages and disadvantages. We cannot say that they are good for us just because they attract investors and thus bring jobs to Singaporeans and that they help companies based here to trade and invest freely with other countries.

Their effects on the country have to be viewed holistically. After more than 20 years when the first FTA was signed and with 27 FTAs currently in force,

- are the good jobs created justifiable given the displacement of Singaporeans in many other jobs?
- has real wages of lower to middle income Singaporeans increased, stagnated or decreased?
- has working conditions improved?
- is the demise of many local companies in the face of foreign competition justifiable?
- is the high cost of branded medicine making healthcare increasingly unaffordable justifiable?
- has inequality improved or gotten worse?
- has life become better or more difficult for the majority?

Trade agreements are good if they are used to improve the lives of the majority of people and not just the rich. They should not take away our right to decide what is good for ourselves and our children. Importantly, the people and the labour unions should have a voice equal to that of business lobbies when negotiating trade agreements as these treaties affect our livelihoods fundamentally, although they operate silently in the background.


Foong Swee Fong




10 Responses to “Free Trade Agreements are not about freeing up trade”

  • rice:

    Foreign Talents Agreement?
    Yes,thats it.

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  • Light The Way:

    More like exploring new avenues for foreign investment losses.

    With write-offs in the billions of Sing Dollar, the Fool’s Gold industry is alive and kicking.

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  • FT Launderers:

    —Fujian gang members have been for at least 6 years—laundering in broad daylight.

    ”But an anti-money laundering bust involving some S$1.8 billion in cash and assets has thrown up questions about how potentially suspicious transactions could have slipped through the cracks.”
    —-A huge elephant was hiding in broad and went through a keyhole.
    Nobody notice anything.
    —-One of them have passports from 5 different countries.
    Stayed here for many years, brought condos and cars and many expensive assets
    Nobody notice anything.
    How many more of these FTs are in our midst; got to ask Wang Yi.
    Since the local authority did not realise they were operating here for the past 6 years.


    Foreign Talents Agreement?
    Yes,thats it.

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  • opposition dude:

    The worst of the so called FTAs signed is CECA which has become a dirty word. PAP let in hordes of these people and had to wayang and say that only a few hundred were transferred here. I’m surprised no one asked for a breakdown of them on work permits and employment passes.

    Back in 2010 in the Suntec area you would see groups of these people at lunchtime. I remember there were a few indian eateries set up there but all gone case by now. Because people these days also work from home I’m not sure if there are still as many of them around compared to the pre pandemic years or not.

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  • Singaporean R Free Rider:

    Nothing wrong for investor wanting to protect their own investment, thus their profit and comfortable lives.

    Poland strongly support UKraine war with Russia, giving them free weapons.

    But, does Poland support Ukraine selling their grains in Poland?

    The answer is a big NO… only stupid Opposition don’t know how to think.

    Poland ban Ukraine grain import to protect farmers.

    Talk about charity. What charity? It is Self Interest First.

    Any Opposition here want to debate about it ?

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    @opposition dude
    Agree CECA is the worst FTA signed. It took away jobs from Singaporeans and we were replaced by less paid foreigners. It removed our middle management causing the necessity of doing two jobs. Many of our middle management became taxi drivers. The third world was allowed to invade us and replace us. Life for Singaporeans has never been the same after the FTA with India and China.Our service sector has suffered and from a First World standard, it is now third world. According to the writer, the US only allows 5,400 Singapore ans to work in the US. The FTA with India allows 50,000/- in our little island. The PAP seem to sign FTA’s in a drunken stupor. Which country will allow 50,000/- with the same job skills as citizens to work in their country?

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  • Harder Truths:

    CECA and other trade deals with India, China Asean that are meant to put $heeple out of business have at least a 70% backing by those same people put out of work.

    This is what ‘democracy’ looks like. Deal with it. Don’t KPKB for own actions. Actions have consequences. No one will give a shit if it comes back to bite you in the ass.

    As the Dead Despot used to say, there is no free lunch, unless you are part of his gang.

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  • CECA - seriously?:

    Is CECA a huge win – huge loss for India – Singapore?

    Enlighten me how it achieves win – win for both Singapore and India?

    Any analysts have done above research on what Singapore has gained from CECA and what loss Singapore has incurred ? Including how many billions Singapore has profited from investments in India?

    How can it be Singapore the second largest investor in India even in front of superpower economies US and China and Japan? If Singapore can invest 1b in India, and if the prospects are truly good, given their financial mights US and China would have invested at least few times that of Singapore’s right?

    Why Themasuck pumped in billions of dollars in 2014 to rescue the ailing Olam? Olam debts have grown from like less than 8billions in 2014 to now 18b in 2023. Is it time to write off the billions of dollars investments?

    Why DBS rescued the bankrupt india bank few years ago? Is it profitable now?

    Were the above high risk rescues a response to pleas from india government and also the CECA?

    Why SingTel was fined 1.9billion by india government which was even bigger than Xiaomi, Oppo, Samsung, etc. much bigger foreign companies considering Singapore has “done so much” for India especially huge amount of jobs “given” to India nationals and also huge investments in india create many jobs in india too? Sinapore also provided various training programs to India nationals such as SIA pilot trading program, Shatex training program, IT training programs (from DBS), etc. For some of these training programs, India nationals were employed in Singapore upon completion. Such training programs are offered to other foreign nationals?

    Lastly, is there foreign nationals diversity among foreign working population in Singapore? I often see IT departments/companies dominated by India nationals among foreigners. I think maybe also finance/banking sector. Also in construction, Shipbuilding, oil refinery, etc. Do we have figures of foreign nationals break down in every industry include government stat boards? Is it a risk if no diversity?

    Lastly, for national security concerns, certain jobs such as cybersecurity and DBA, software developers, etc. should not be performed by foreigners in government (especially SingPass)/banking & finance, healthcare, national critical infrastructure (energy, transport, etc.) IT systems. This is to prevent confidential data leak which IT professionals can download from databases and sell to cyber criminals and scammers then flee Singapore.

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  • Singaporean R Free Rider:

    To the 2 idiots who thumb down my post.

    Even ASML CEO said China is stealing their rice bowls.

    Our great PAP ex Minister Lim Swee Say is right to call upon Singaporeans to be cheaperer, betterer and fasterer.

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  • Tax is 20%+17%:

    These fta mostly benefits GLCs and the other countries. There is hardly any benefit for Singaporea. And it doesn’t really benefit local companies manufacturing products because the cost of manufacturing in singapore is high and the market profit around the region comprising of low ses people is not there

    I will be dreaming if I am local company I want to sell my product to Philippines Thailand India at SG prices. Pls no one can afford SG prices..

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