Vietnam signs free trade deal with four European nations

Vietnam and Iceland, Liechtenstein, Norway, and Switzerland signed a free trade agreement in Hanoi on Sunday, aiming to broaden their market horizons amid disruptions caused by U.S. tariffs. The deal, between Vietnam, Southeast Asia’s fastest-growing economy, and the European Free Trade Association (EFTA), eliminates or reduces customs duties on various products, including industrial, fish, and agricultural items.

Vietnam’s top leader, To Lam, and EFTA representatives signed the agreement in the capital, highlighting the parties' commitment to strengthening a rules-based trading system in the face of global economic volatility, according to a government statement. The agreement, concluded after more than a decade of negotiations, aims to diversify Vietnam’s import and export markets and deepen its integration into global value chains.

The move comes after the U.S. launched a wave of tariffs under President Donald Trump, leaving Vietnam with a significant tax on its exports to the U.S. Experts view the new deal as a joint effort to diversify commercial ties, reduce reliance on major trading partners, and increase economic autonomy. Vietnam and EFTA concluded negotiations in July, after restarting talks in September last year following a decade-long lull since 2012.

The agreement covers trade in goods and services, intellectual property rights, trade remedies, and sustainable development. Bilateral trade between the EFTA and Vietnam last year reached 4.8 billion euros (US$5.4 billion), with electrical and mechanical machinery, fish, and pharmaceutical products as the top exports to Vietnam.

In return, Vietnam exported machinery, footwear, and apparel to the EFTA. The EFTA, created as a counterpart to the European Economic Community—precursor to the EU—has four member states close to but not part of the EU.