Vietnam and EFTA Sign Free Trade Agreement After Decade-Long Talks
Vietnam signed a free trade agreement with the four EFTA nations-Iceland, Liechtenstein, Norway, and Switzerland-in Hanoi on October 18, concluding over a decade of negotiations.
Vietnam and the European Free Trade Association (EFTA) signed a free trade agreement in Hanoi on October 18. The deal with the four EFTA members-Iceland, Liechtenstein, Norway, and Switzerland-concludes negotiations that began in 2012, concluded in July, and were relaunched in September 2022 after stalling since 2018. Vietnam’s top leader To Lam attended the signing alongside representatives of the EFTA governments.
Scope and economic impact of the deal
The agreement covers trade in goods and services, intellectual property rights, trade remedies, and sustainable development. Bilateral trade between Vietnam and the EFTA bloc has averaged approximately $2 billion annually. According to EFTA, trade between the two sides amounted to €4.8 billion ($5.4 billion) last year.
Tariff elimination and market access
The pact eliminates or reduces customs duties on industrial, fish, and agricultural products. The Norwegian government stated that around half of its exports to Vietnam would become tariff-free when the agreement enters into force. More than 98% of Norway's exports to Vietnam are expected to qualify for tariff-free access within seven years.
EFTA’s top exports to Vietnam last year were electrical and mechanical machinery, fish, and pharmaceutical products. Vietnam mainly imports industrial machinery and equipment, chemicals, pharmaceuticals, and raw materials for production from the EFTA market.
Vietnam's trade flows and strategic goals
Vietnamese authorities expect the agreement to help diversify the country’s import and export markets and integrate more deeply into global value chains. The government said the deal will support Vietnam’s move into higher-value-added activities. Experts view it as a shared initiative to diversify commercial ties and reduce reliance on major trading partners.
Context and broader implications
The pact follows a US tariff blitz under President Donald Trump that imposed a hefty tax on Vietnam’s US exports. Long-stalled talks were relaunched last year amid global tensions over US tariffs. History and politics scholar Do Dinh Lam Khang said the agreement aims for greater strategic autonomy amid US trade pressure.
Do Dinh Lam Khang said: "As the US increasingly exerts trade pressure on European countries, the agreement is a joint effort to turn economic integration into greater strategic autonomy." The Vietnamese government said the deal will "reinforce the rules-based trading system amid continued volatility in the global economy." The agreement is expected to establish a framework for closer trade ties between Vietnam and the four European countries.
