Vietnam Signs Trade Deal with Four European Nations Outside EU

Vietnam has signed a free trade agreement with four European countries outside the European Union, seeking to expand its international trade ties and diversify export markets amid uncertainty in global commerce and US tariff measures.

The agreement was signed in Hanoi on Sunday between Vietnam and the European Free Trade Association (EFTA), which comprises Iceland, Liechtenstein, Norway and Switzerland. The signing took place in the presence of Vietnam’s top leader, To Lam, and representatives of EFTA governments.

The deal aims to eliminate or reduce customs duties on a range of products, including industrial goods, fish and agricultural products. It also covers trade in services, intellectual property rights, trade remedies and sustainable development.

In a government statement, Vietnam said the agreement reflected the parties’ determination to strengthen the rules-based trading system amid continued volatility in the global economy.

The government also said the deal was expected to help Vietnam diversify its import and export markets and become more deeply integrated into global value chains.

A Decade of Trade Negotiations

The agreement follows a lengthy negotiating process that officially began in 2012. Vietnam and EFTA concluded negotiations in July after talks were relaunched in September last year, following a period of stalled discussions dating back to 2018.

The deal comes as countries and businesses reassess their international trading relationships amid changes in US trade policy. Tariff measures introduced under US President Donald Trump have affected global commerce, while Vietnam has faced significant tariffs on its exports to the American market as negotiations with Washington continue.

For Vietnam, the agreement offers another route to strengthen commercial links with European economies and broaden the markets available to its manufacturers and exporters.

Experts have described the deal as part of a wider effort by both sides to diversify trade relationships and reduce dependence on major trading partners.

History and politics scholar Do Dinh Lam Khang told AFP that the agreement reflected a joint effort to strengthen economic integration, develop alternative commercial relationships and increase strategic autonomy rather than relying exclusively on their largest trading partners.

Khang also said closer ties with EFTA economies could support Vietnam’s ambition to move into higher-value-added economic activities.

Trade Between Vietnam and EFTA

Bilateral trade between Vietnam and EFTA was valued at €4.8 billion, equivalent to approximately $5.4 billion, last year, according to the association.

EFTA countries’ main exports to Vietnam included electrical and mechanical machinery, fish and pharmaceutical products.

Vietnam, meanwhile, exported machinery, footwear and apparel to EFTA markets, reflecting the importance of its manufacturing sector to international trade.

By reducing or eliminating tariffs on selected products, the agreement is intended to improve market access and create opportunities for businesses operating across the participating economies. The precise benefits will depend on the agreement’s provisions and how its terms are implemented.

What Is EFTA?

The European Free Trade Association was established as a counterpart to the European Economic Community, the predecessor of the European Union.

Unlike EU member states, Iceland, Liechtenstein, Norway and Switzerland remain outside the bloc, although they maintain close economic relationships with European markets through different arrangements.

The new agreement adds Vietnam to EFTA’s network of trade partnerships and provides a framework for closer economic cooperation between Southeast Asia and the four European countries.

As global trade patterns continue to evolve, the deal highlights Vietnam’s efforts to widen its international economic relationships while giving EFTA businesses another framework for accessing a growing Southeast Asian economy.