On October 18, 2026, in Hanoi, Vietnamese Minister of Industry and Trade Lê Mạnh Hùng and representatives of the member states of the European Free Trade Association (EFTA) officially signed the Vietnam - EFTA Free Trade Agreement (VEFTA). The signing ceremony took place under the witness of General Secretary and State President Tô Lâm, with the attendance of Swiss President Guy Parmelin, Prime Minister of Liechtenstein Brigitte Haas, Minister for Foreign Affairs of Iceland Þorgerður Katrín Gunnarsdóttir, and State Secretary of the Norwegian Ministry of Foreign Affairs Astrid Bergmål. This milestone concludes a 14-year negotiation process, establishing a new economic partnership framework between Vietnam and leading global innovators.
A 14-year milestone and comprehensive commitments
Established in 1960, EFTA comprises four countries: Switzerland, Norway, Iceland, and Liechtenstein. According to reports from VnExpress and VnEconomy, VEFTA is one of Vietnam's longest-negotiated agreements, reflecting the depth and comprehensive nature of its commitments.
The agreement covers multiple critical areas, including:
- Trade in goods: Tariff reductions, addressing technical barriers to trade, sanitary and phytosanitary measures, customs procedures, and trade remedies.
- Trade in services and investment: Establishing a transparent, stable regulatory environment for service delivery and foreign direct investment flows.
- Specialized disciplines: Intellectual property, government procurement, competition policy, SME support, dispute settlement mechanisms, and commitments linking trade with sustainable development.
Complementary trade structure and high-quality capital potential
According to VietnamPlus, two-way trade turnover between Vietnam and EFTA nations has averaged nearly USD 2 billion annually. Bilateral trade with Switzerland in particular recorded significant momentum, expanding by nearly 20% year-on-year in 2025 to reach approximately USD 3.5 billion.
The bilateral import-export structure is distinctly complementary rather than directly competitive:
- Vietnamese exports to EFTA: Key export categories include seafood, footwear, textiles, machinery and equipment, along with electronic parts and equipment.
- EFTA exports to Vietnam: Heavily focused on machinery, industrial equipment, chemicals, pharmaceuticals, and manufacturing inputs.
On the investment front, as of late 2025, Switzerland had 234 projects in Vietnam with total registered capital surpassing USD 2.4 billion; Norway held 62 projects valued at over USD 201 million. Numerous multinational corporations from EFTA successfully operate in Vietnam across processing, manufacturing, food, pharmaceuticals, energy, and technology. Looking forward, EFTA investors are planning large-scale ventures in innovation, high-tech sectors, logistics, and precision engineering.
Four focal pillars for industrial and supply chain cooperation
Speaking at the Switzerland - Vietnam Economic Forum 2026, Swiss President Guy Parmelin affirmed that the agreement represents a strategic commitment to enhancing legal certainty and improving market access for businesses amid global supply chain volatility. On the Vietnamese side, Minister Lê Mạnh Hùng emphasized that the agreement's success would be measured through concrete projects, technology transfers, and upgraded supply chain capabilities.
The Ministry of Industry and Trade of Vietnam outlined four core priorities to materialize these mutual benefits:
- Processing, manufacturing, and supply chain: Prioritizing precision engineering, automation, supporting industries, and advanced manufacturing technologies to elevate the capabilities of domestic suppliers.
- Energy transition and green growth: Strengthening cooperation in smart grids, energy efficiency, green technologies, eco-industrial park models, and the circular economy.
- Innovation and digital technology: Accelerating technical transfers in the digital economy, healthcare, life sciences, and research and development (R&D) capabilities.
- Human resource development: Enhancing workforce capabilities and vocational education, drawing on Switzerland's dual vocational training model to align with business demands.
Strategic significance for enterprises
The conclusion of VEFTA offers tangible strategic advantages for foreign-invested enterprises choosing Vietnam as an export-oriented manufacturing hub:
- Access to high-value markets: Manufacturers in Vietnam gain preferential tariff access to distribute premium products to Europe's highest-income economies.
- Access to advanced technology and inputs: Lower trade barriers allow Vietnam-based producers to more easily import advanced machinery, chemicals, industrial equipment, and European pharmaceuticals to enhance domestic value-add.
- Alignment with sustainability standards: The agreement establishes robust benchmarks in intellectual property, environmental governance, and sustainable development, incentivizing businesses to adopt low-emission production models and circular economy practices that meet stringent global supply chain requirements.
To capitalize on new free trade agreements, SUNINCON stands ready to support international investors with market research, industrial park surveys, and supply chain advisory services in Vietnam.
References
- VnExpress International
- VietnamPlus
- VnEconomy
