Vietnam and four European nations outside the European Union signed a free trade agreement in Hanoi on Sunday, seeking to diversify their markets as United States tariffs disrupt global commerce.
Eliminating Duties Across Key Sectors
Customs duties on industrial, fish, and agricultural goods are either slashed or eliminated under the accord between the European Free Trade Association—consisting of Iceland, Liechtenstein, Norway, and Switzerland—and Southeast Asia’s most rapidly expanding economy. Representatives of EFTA governments and Vietnam’s top leader, To Lam, witnessed officials sign the pact in the capital.
🔴 Vietnam to sign EFTA trade deal Sunday; US trade pact still stalledVietnam will sign a free trade agreement with the European Free Trade Association (Switzerland, Norway, Iceland, Liechtenstein) on Sunday in Hanoi, with Swiss Economy Minister Guy Parmelin attending.… pic.twitter.com/16UwkH5S9X
Vietnam indicated that the pact demonstrated the participants’ commitment to strengthening the rules-based trading system in the face of persistent global economic instability. The government also expected the pact to help Vietnam diversify its import and export markets and integrate more deeply into global value chains. The agreement covers trade in goods and services, intellectual property rights, trade remedies, and sustainable development.
A Decade of Negotiations Concluded
Following discussions that officially commenced back in 2012, Vietnam and EFTA finalized their negotiations in July, more than ten years later. The parties relaunched negotiations in September last year, after they had stalled since 2018.
The agreement followed a global trade-disrupting tariff blitz by the United States under President Donald Trump. That wave of protectionism left Vietnam with a hefty tax on its US exports amid ongoing negotiations with Washington.
Strategic Autonomy Amid Trade Pressures
Experts note that the new accord reflects a shared initiative to diversify commercial ties and reduce reliance on major trading partners. As the US increasingly exerts trade pressure on European countries, the agreement serves as a joint effort to turn economic integration into greater strategic autonomy.
As the US increasingly exerts trade pressure on European countries, the agreement is a joint effort to turn economic integration into greater strategic autonomy and to develop alternative commercial relationships rather than relying exclusively on their largest partners.
That perspective was highlighted by history and politics scholar Do Dinh Lam Khang in remarks given to AFP. For Vietnam, closer ties with EFTA economies could also support its ambition to move into higher-value-added activities, Khang added.
According to the association, two-way commerce between Vietnam and EFTA reached 4.8 billion euros (US$5.4 billion) over the course of last year. Last year, the top goods shipped by EFTA countries to Vietnam consisted of fish, pharmaceutical products, and electrical and mechanical machinery. Machinery, footwear, and apparel were manufacturing hub Vietnam’s major exports to the EFTA.
