Vietnam, EFTA nations sign free trade deal amid US tariff turmoil

Vietnam and four European countries outside the European Union signed a free trade agreement in Hanoi on Sunday, seeking to diversify their markets as US tariffs disrupt global commerce.
The agreement between Vietnam, Southeast Asia’s fastest-growing economy, and the European Free Trade Association (EFTA) aims to eliminate or reduce customs duties on a range of products, including industrial goods, fish and agricultural commodities.
The deal was signed in the presence of Vietnam’s top leader To Lam and representatives of the EFTA governments. The association comprises Iceland, Liechtenstein, Norway and Switzerland.
The Vietnamese government said the agreement demonstrated the parties’ commitment to strengthening the rules-based trading system amid continued volatility in the global economy.
It is also expected to help Vietnam diversify its import and export markets and integrate more deeply into global value chains, the government said.
Vietnam and EFTA concluded negotiations in July, more than a decade after formal talks began in 2012. Negotiations, which had stalled since 2018, resumed in September last year.
The agreement comes as US President Donald Trump’s sweeping tariffs have disrupted global trade and left Vietnamese exports facing steep duties in the US market, even as Hanoi continues negotiations with Washington.
Experts say the deal reflects a shared effort to diversify commercial ties and reduce dependence on major trading partners.
“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,” history and politics scholar Do Dinh Lam Khang told AFP.
Closer ties with EFTA economies could also help Vietnam move towards higher-value-added industries, Khang said.
The agreement covers trade in goods and services, intellectual property rights, trade remedies and sustainable development, among other areas.
Bilateral trade between EFTA and Vietnam was valued at 4.8 billion euros ($5.4 billion) last year, according to the association.
Electrical and mechanical machinery, fish and pharmaceutical products were EFTA’s leading exports to Vietnam, while machinery, footwear and apparel were among Vietnam’s major exports to the four European countries.
EFTA was established as an alternative to the European Economic Community, the predecessor of the European Union. Its four members maintain close ties with the EU but have not joined the bloc.