Vietnam concludes 14-year trade deal with European Free Trade Association

Vietnam and the European Free Trade Association signed a free trade agreement in Hanoi on Sunday, October 18. The pact links the Southeast Asian economy with four European nations outside the EU: Iceland, Liechtenstein, Norway, and Switzerland. The deal takes effect after the parties concluded their negotiations in July, capping a process that officially began more than a decade earlier.

Officials described the agreement as a demonstration of the parties' resolve to reinforce the rules-based trading system amid continued volatility in the global economy. According to a government statement, the deal is expected to help Vietnam diversify its import and export markets while integrating more deeply into global value chains. The signing ceremony was attended by Vietnam’s top leader To Lam and representatives of the EFTA governments.

The partnership emerged in response to a global trade-disrupting tariff blitz by the US under President Donald Trump, which has left Vietnam with a hefty tax on its US exports during ongoing negotiations with Washington. Bilateral trade between the EFTA and Vietnam was valued at 4.8 billion euros in the last year, according to the association. Electrical and mechanical machinery, fish, and pharmaceutical products were the EFTA nations' top exports to Vietnam, while machinery, footwear, and apparel remained Vietnam's major exports to the bloc.

History and politics scholar Do Dinh Lam Khang told AFP that the agreement 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, Khang noted that the deal serves as a joint effort to turn economic integration into greater strategic autonomy and develop alternative commercial relationships rather than relying exclusively on their largest partners.