Vietnam and four European countries outside the European Union signed a free trade agreement in Hanoi on Sunday, in hopes to expand their markets while tariffs imposed by Washington disrupt global trade.
The partners are the European Free Trade Association (EFTA), whose members are Iceland, Liechtenstein, Norway and Switzerland. The pact removes or lowers customs duties on a range of goods, including industrial, fish and agricultural products.
Vietnamese leader To Lam attended the signing, alongside representatives of the EFTA governments. His government said the agreement reflects a shared commitment to strengthening rules-based trade at a time of ongoing instability in the world economy.
It also expects the deal to help the country diversify its import and export markets and plug further into global supply chains.
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The agreement has been a long time coming as formal talks began in 2012, stalled in 2018, and were relaunched in September last year. Negotiations concluded in July.
Beyond tariffs, the agreement covers trade in goods and services, intellectual property rights, trade remedies and sustainable development, according to both sides.
The stakes are meaningful. Trade between EFTA and Vietnam was worth 4.8 billion euros ($5.4 billion) last year, according to the association. Machinery, fish and pharmaceutical products led EFTA’s exports to Vietnam. Vietnam, a major manufacturing hub, mainly sent machinery, footwear and clothing in the other direction.
The timing is hard to miss. The signing follows a sweeping round of US tariffs under President Donald Trump, which has left Vietnam facing a heavy levy on its exports to the United States while talks with Washington continue.
EFTA was set up as a counterpart to the European Economic Community, the forerunner of the EU. Its four members maintain close ties with the EU but have chosen not to join it.
