Vietnam and the European Free Trade Association (EFTA) have signed a Free Trade Agreement (FTA) after 14 years of negotiations, which began in 2012. The agreement is viewed as a move by both sides to diversify their trading partners amid growing uncertainties in global trade driven by U.S. tariff policies.

The Vietnamese Ministry of Industry and Trade announced on the 18th (local time) that it had signed the FTA with EFTA in the capital city of Hanoi. To Lam, General Secretary of the Communist Party and President of Vietnam—who ranks first in Vietnam's political hierarchy—attended the signing ceremony. Also present were Le Manh Hung, Vietnam’s Minister of Industry and Trade, and representatives from EFTA member states, including Swiss President Guy Parmelin.

EFTA is an economic cooperative body consisting of four countries that are not members of the European Union (EU): Switzerland, Norway, Iceland, and Liechtenstein. Once the agreement takes effect, EFTA member states will eliminate import tariffs on Vietnamese industrial products and fisheries. In turn, Vietnam will phase out or abolish tariffs on most products imported from EFTA member states over the next 11 years. Certain EFTA agricultural products, such as cheese, coffee, and chocolate, will also gain tariff-free access to the Vietnamese market.

Vietnam primarily exports fisheries, footwear, textiles, machinery and equipment, and electronic products and components to EFTA member states, while importing industrial machinery and equipment, chemical products, pharmaceuticals, and raw materials for production. In a separate statement, the Norwegian government announced that upon the agreement's entry into force, about half of Norway’s export items to Vietnam will receive duty-free benefits, with that proportion expanding to over 98% within seven years.

AFP reported that both sides signed the FTA to diversify their markets as global trade faces disruptions from U.S. tariff measures. Experts also assessed that the agreement reflects a shared determination to reduce dependence on major trading partners.

The trade volume between Vietnam and EFTA member states averages around 2 billion dollars (approx. 2.675 trillion won) annually. EFTA member states have a combined population of approximately 13 million, with a total Gross Domestic Product (GDP) reaching 1 trillion dollars (approx. 1,337 trillion won). EFTA is the world's 9th largest goods trading group and 5th largest services trading group.

Although both sides initiated official FTA negotiations in 2012, talks stalled starting in 2018. Negotiations resumed in September of last year, leading to a final conclusion this July and the formal signing of the agreement on this day.

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