The European Union (EU) – Vietnam Free Trade Agreement (EVFTA) is set to have considerable impact on the future of the financial and telecom sectors of Vietnam, heard a workshop in Hanoi on October 23.

Nguyen Thi Thu Trang, Director of the VCCI’s Centre for WTO and
Economic Integration, addresses the workshop in Hanoi on October 23 

At the event, Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Hoang Quang Phong said the EVFTA, signed on June 30 this year and currently in the ratification process, includes many notable commitments regarding financial services like banking, insurance and securities, and telecom services.

The openness of the Vietnamese market has already been higher than the commitment to the World Trade Organisation (WTO), and the country has also issued many minimum standards for the State’s management of these services. Meanwhile, the EU has strength in financial and telecom services. Therefore, the EVFTA is predicted to have considerable influence on the future of the financial and telecom sectors in the country, he noted.

Nguyen Thi Thu Trang, Director of the VCCI’s Centre for WTO and Economic Integration, said the EVFTA will not have too big direct impact on foreign investment in the financial sector, noting that reinsurance ceding service is the only new one to be opened for foreign investment under the pact, while the commitment level is unchanged compared to that in the WTO.

Under the EVFTA, no more new areas in the telecom sector will be opened for foreign investment, and the commitment level would also not change much in the first five years of the agreement’s enforcement. After that, the sector’s openness to foreign investment would be higher than the commitment to the WTO.

Trang noted the financial sector’s business climate will become more stable and predictable while the telecom market will also be more stable and transparent thanks to commitments in the trade deal.

Indirect impact of the EVFTA will include higher service demand, better business environment, and chances created for investment in EU economies and for cooperation with EU partners.

Aside from opportunities, many economic sectors of Vietnam, especially the financial and telecom sectors, will also face stronger competition from foreign service providers. Additionally, clients’ requirements for services will increase. Challenges relevant to IT application, information security and transaction safety will also be part of the indirect impact of the EVFTA, according to the centre director.