Vietnam signs free-trade agreement with four European countries

Hanoi witnessed the signing of a free trade agreement on Sunday between Vietnam and four European nations, seeking to broaden their market reach amidst disruptions caused by US tariffs. The pact, between Vietnam's fastest-growing economy and the European Free Trade Association (EFTA), encompasses Iceland, Liechtenstein, Norway, and Switzerland.

This deal eliminates or reduces customs duties on a range of goods, including industrial products, fish, and agricultural items. Vietnam's top leader, To Lam, along with EFTA government representatives, witnessed the signing ceremony in the capital. The agreement demonstrates the parties' commitment to fortifying the rules-based trading system in the face of global economic instability, according to a government statement.

The negotiation process, which began in 2012, concluded in July after more than a decade of talks. The parties resumed negotiations in September of the previous year after a lull since 2018. The agreement follows a series of tariffs imposed by the United States under former President Donald Trump, which has adversely affected Vietnam's exports to the US.

Experts view this new deal as a joint effort to diversify commercial ties and lessen reliance on major trading partners. History and politics scholar Do Dinh Lam Khang remarked that these closer ties with EFTA economies could bolster Vietnam's pursuit of higher-value-added activities. The agreement covers trade in goods and services, intellectual property rights, trade remedies, and sustainable development.

Bilateral trade between EFTA and Vietnam last year reached 4.8 billion euros (US$5.4 billion), with electrical and mechanical machinery, fish, and pharmaceutical products being the EFTA's top exports to Vietnam. In contrast, machinery, footwear, and apparel were Vietnam's major exports to the EFTA. The EFTA, established as a counterpart to the European Economic Community, the precursor to the European Union, is closely associated with these four member states but has not joined.