Vietnam Signs Free Trade Agreement with EFTA
Vietnam signed a free trade agreement with Norway, Switzerland, Iceland, and Liechtenstein on Sunday in Hanoi. The deal, announced by the governments of Vietnam and Norway, aims to improve trade relations between Vietnam and the European Free Trade Association (EFTA).
The agreement waives or reduces customs duties on various products. It is expected to significantly benefit Vietnam's economy. About half of Norway's exports to Vietnam will be tariff-free when the agreement takes effect. More than 98% will become tariff-free within seven years, according to the Norwegian government. The deal covers trade in goods and services, intellectual property rights, and sustainable development, among other areas.
Vietnam's Trade Ministry stated that the agreement shows both parties' commitment to strengthen the rules-based trading system. This is important amid global economic volatility. In 2022, trade between Vietnam and EFTA countries reached €4.8 billion ($5.4 billion). Vietnam mainly exports seafood, footwear, textiles, machinery, and electronics to the EFTA market. It imports industrial machinery, chemicals, and raw materials.
Negotiations for this deal resumed in 2022 after being stalled in 2018 due to rising global tensions over tariffs. The trade ministry noted that the deal will help Vietnam diversify its import and export markets. It will also help the country integrate further into global value chains.
The agreement is likely to create more trade opportunities for Vietnam, especially in sectors like seafood, textiles, and machinery. Increased exports to EFTA countries could positively affect Vietnam's trade balance.
Watch for more details on the implementation timeline and specific tariff reductions as the agreement progresses.
Based on reporting by: dw.com, businesstimes.com.sg