Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan led the Vietnamese negotiation delegation attending the EFTA Ministerial Conference in Iceland. (Source: efta.int)

On July 2, Vietnam and the member states of the European Free Trade Association (EFTA) officially issued a Joint Declaration announcing the conclusion of negotiations on their Free Trade Agreement (FTA).

Promoting sustainable development between Vietnam and EFTA

According to the Ministry of Industry and Trade, the completion of negotiations marks a significant step in Vietnam's international economic integration process, laying the foundation for expanding trade, investment, and various fields of mutual interest with highly developed European economies.

The agreement is designed as a comprehensive, high-standard pact covering a wide range of areas, including trade in goods, trade in services, investment, rules of origin, intellectual property, government procurement, trade remedies, trade and sustainable development, small and medium-sized enterprises (SMEs), as well as cooperation and capacity-building programmes.

The objective of the Agreement is to gradually eliminate or reduce tariffs, facilitate trade activities, improve the investment environment, and promote sustainable development between Vietnam and EFTA member countries.

On June 22, at the EFTA Ministerial Conference held in Iceland, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan stressed that the Agreement is particularly significant as it connects economies with complementary strengths.

While EFTA countries have advantages in innovation, technology, finance, clean energy, and sustainable development, Vietnam is emerging as a dynamic center for production, trade, and investment in the Asian region.

“With comprehensive and high-standard commitments, the Agreement will contribute to building a stable, transparent, and predictable business environment, creating conditions to strongly promote the flows of trade, investment, technology, knowledge, and innovation between Vietnam and EFTA countries,” emphasised Deputy Minister Nguyen Sinh Nhat Tan.

Meanwhile, speaking at the EFTA Ministerial Conference as EFTA's spokesperson on FTA negotiations with Vietnam, Norwegian Foreign Minister Espen Barth Eide remarked: “The Agreement will improve market access for goods and services, while also enhancing cooperation on sustainable development and intellectual property.”

The parties have not yet announced detailed tariff schedules for each product line, but EFTA documents have outlined the main commitments and timelines for tariff elimination on industrial goods, seafood, and certain agricultural products. (Source: Vneconomy)

New momentum for import-export activities

Over the past decade, trade relations between Vietnam and EFTA have maintained a positive growth trend. By 2025, bilateral trade turnover is expected to reach approximately 4.8 billion EUR, with Vietnam achieving a trade surplus of about 2.5 billion EUR.

EFTA exports to Vietnam mainly include electrical machinery, pharmaceuticals, mechanical machinery, and seafood. Conversely, Vietnam exports to this bloc products such as electrical machinery, footwear, textiles, and mechanical machinery.

According to EFTA's chapter-by-chapter explanation, when the Agreement comes into effect, EFTA countries have committed to continue eliminating all import tariffs on industrial goods, seafood, and marine products originating from Vietnam.

Conversely, Vietnam will eliminate tariffs on most industrial goods and seafood originating from EFTA within a maximum period of 11 years.

For agricultural products, Vietnam and each EFTA country will open their markets based on export interests and the sensitivity of each party.

Some key EFTA products, including cheese, coffee, chocolate, baby food and dietary supplements, will be exempt from tariffs in Vietnam within a maximum of 16 years after the Agreement enters into force.

EFTA countries also offer preferences for agricultural products in which Vietnam has export interests, with commitment levels equivalent to EFTA's recent FTAs and in line with each country's agricultural policy.

The parties have not yet announced detailed tariff schedules for each product line, but EFTA documents have outlined the main commitments and timelines for tariff elimination on industrial goods, seafood, and certain agricultural products.

The conclusion of the FTA negotiation process between Vietnam and EFTA not only opens a new chapter in economic-trade relations between Vietnam and the four member countries but also sets the stage for promoting high-quality trade and investment flows.

When the Agreement is signed and implemented, it is expected to become a crucial driver for cooperation in technology, innovation, green transition, and sustainable development, while also enhancing the competitiveness of Vietnamese enterprises, helping them to integrate more deeply into the global value chain.