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Vietnam Set to Sign Free Trade Pact With European Bloc This Week

Hanoi also sends final wording of trade deal to Washington as tariff talks near conclusion

By LineZotpaper
Published
Read Time2 min
Vietnam will sign a free trade agreement with the European Free Trade Association (EFTA) in Hanoi on Sunday, while closing in on a separate trade agreement with the United States, according to officials and reports.

The agreement with EFTA, which comprises Switzerland, Norway, Iceland and Liechtenstein, will be signed in the presence of Swiss Economy Minister Guy Parmelin, who is currently travelling in Asia. Talks between Vietnam and the bloc began in 2012 and were formally concluded in July after a ministerial meeting in Reykjavik that involved what the bloc described as intensive technical talks.

The pact covers trade in goods and services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade, investment, intellectual property rights, trade remedies, government procurement, trade and sustainable development, small and medium-sized enterprises, and cooperation and capacity building. Bilateral trade between EFTA and Vietnam reached USD 5.4 billion in 2025, up from about USD 561 million a decade earlier.

The signing ceremony will be clouded by Vietnam's recent arrest of Nguyen Duc Thuan, a 52-year-old Norwegian national of Vietnamese descent, on terrorism-related charges. Thuan is one of three activists from the pro-democracy group Viet Tan whom Vietnamese authorities say were arrested for entering the country illegally. Rights groups and Viet Tan say the men were abducted in Cambodia, although Phnom Penh has said it has no record of them leaving the country.

Norway's Foreign Ministry said State Secretary Astrid Bergmal, who will attend the signing, will raise Thuan's case with Vietnamese authorities during her visit. The ministry said it is treating the case as a high priority and hopes it may be resolved without unnecessary delay.

The EFTA deal comes as Vietnam and the United States move toward signing their Agreement on Reciprocal, Fair, and Balanced Trade. Deputy Prime Minister Pham Gia Tuc told a business summit that Vietnam has sent its final wording for the deal to Washington, with hopes it can be quickly signed. The two nations began negotiations in April 2025, shortly after Vietnam was hit with a 46 percent tariff in the U.S. "liberation day" tariff announcement.

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Analysis

Why This Matters

  • Vietnam is deepening its trade integration on two fronts, with a European bloc and with the United States, strengthening its position in global supply chains at a time of heightened tariff tensions.
  • The EFTA pact could significantly expand two-way trade, but the detention of a Norwegian citizen raises questions about whether trade diplomacy will be accompanied by progress on human rights.
  • A completed U.S. agreement would ease the impact of the 46 percent tariff that Washington imposed on Vietnamese goods last year.

Background

Vietnam has pursued an extensive network of free trade agreements as part of its export-driven growth strategy. EFTA is a regional trade bloc of four European states that are not members of the European Union, with Switzerland and Norway as its largest economies. The deal with Vietnam would be another step in the bloc's engagement with fast-growing Asian economies. The U.S. negotiations follow the sweeping tariff measures announced in April 2025, which hit Vietnam particularly hard, prompting Hanoi to seek a negotiated settlement.

Key Perspectives

Hanoi: Sees the EFTA agreement as a way to secure broader market access and investment linkages with Europe, and views the U.S. deal as critical to easing tariff pressure on its export economy.

EFTA states: Switzerland, Norway, Iceland and Liechtenstein are expanding commercial relations with Southeast Asia, but Norway faces domestic concern over the detention of its citizen and has signalled it will raise the issue directly.

Rights groups and Viet Tan: Argue that the arrested activists were abducted in Cambodia rather than entering Vietnam illegally, and say the case highlights the risks of celebrating trade deals while political opponents are detained.

Skeptics of the trade push: Question whether the U.S. agreement will truly be balanced and whether Vietnam's commitments on issues such as government procurement and sustainable development will be enforceable.

What to Watch

  • Whether the signing ceremony proceeds as scheduled on Sunday and what Norwegian officials say publicly about Nguyen Duc Thuan's case.
  • Washington's response to Vietnam's final trade agreement wording, and whether a signing date is announced before the end of the year.
  • Domestic political reaction in Norway and other EFTA states, which could affect ratification or future trade cooperation.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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