Coin Press - Vietnam and EFTA states sign free-trade agreement in Hanoi

Vietnam and the four-member European Free Trade Association signed a free-trade agreement in Hanoi intended to diversify markets and deepen commercial ties.

Vietnam and four European countries outside the European Union (EU) signed a free trade agreement in Hanoi on Sunday, as both sides seek to diversify their markets while US tariffs disrupt global trade. The deal, between Southeast Asia’s fastest-growing economy and the European Free Trade Association (EFTA), whose members are Iceland, Liechtenstein, Norway and Switzerland, eliminates or reduces customs duties on goods including industrial, fish and agricultural products.

It was signed in the presence of Vietnam’s top leader To Lam and representatives of EFTA governments. In a statement, the Vietnamese government stated the agreement indicated the parties’ resolve to “reinforce the rules-based trading system amid continued volatility in the global economy”. It stated the deal was also expected to help Vietnam “diversify its import and export markets” and “integrate more deeply into global value chains”.

Vietnam and EFTA concluded negotiations in July, more than a decade after talks officially began in 2012. The talks had stalled in 2018 and were relaunched in September last year. The agreement follows a trade-disrupting tariff blitz by the United States under President Donald Trump, which has left Vietnam facing a hefty duty on its exports to the US while negotiations with Washington continue.

Experts say the deal reflects a shared effort to diversify trade ties and reduce reliance on major 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. For Vietnam, closer ties with EFTA economies could support its ambition to move into higher-value activities, Khang noted.

Both sides say the agreement covers trade in goods and services, intellectual property rights, trade remedies and sustainable development, among other areas. Based on EFTA, two-way trade between the bloc and Vietnam was worth 4.8 billion euros ($5.4 billion) last year. EFTA’s top exports to Vietnam were electrical and mechanical machinery, fish and pharmaceuticals, while Vietnam, a manufacturing hub, mainly exported machinery, footwear and clothing.

EFTA was created as a counterpart to the European Economic Community, the forerunner of the EU. Its four members are close to the EU but have not joined it.

T.Morelli--CPN