On October 18, Vietnam and the member states of the European Free Trade Association (EFTA) are scheduled to sign a free trade agreement following the successful conclusion of negotiations in July 2026, bringing to a close a 14-year negotiation process involving 21 official rounds of talks.

The Free Trade Agreement between EFTA and Vietnam is expected to create substantial opportunities for Vietnamese businesses.

EFTA is an intergovernmental organization established to promote free trade and economic integration. It currently comprises four member states: Iceland, Liechtenstein, Norway and Switzerland.

Vietnam and EFTA conducted 21 official rounds of negotiations. The most recent round took place in Iceland from June 17 to 22. On June 22, a Vietnamese negotiating delegation led by a Deputy Minister of Industry and Trade attended the EFTA Ministerial Meeting in Liechtenstein to discuss the remaining outstanding issues and conclude negotiations.

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

Trade between Vietnam and EFTA has grown steadily in recent years. In 2025, bilateral trade reached EUR 4.8 billion, with Vietnam recording a trade surplus of EUR 2.5 billion, reflecting the growing importance of this economic partnership.

According to the leadership of Vietnam’s Ministry of Industry and Trade, the Vietnam–EFTA Free Trade Agreement will create significant opportunities for Vietnamese businesses.

First, the Agreement will help diversify export markets, enabling Vietnamese products to gain easier access to high-purchasing-power markets with some of the world’s most stringent quality requirements, including Iceland, Liechtenstein, Norway and Switzerland.

Furthermore, the Agreement is expected to attract high-quality investment from EFTA countries into Vietnam’s priority sectors, including high technology, manufacturing and processing industries, clean energy, green transition, innovation and human resource development.

Such investment represents not only an inflow of capital but also an opportunity to acquire advanced technologies, management expertise and sustainable development models.

For Vietnamese businesses, the Ministry’s leadership noted that cooperation with EFTA partners would help strengthen competitiveness, progressively meet higher international standards and facilitate deeper integration into global value chains.

Conversely, with a population of more than 100 million, a strategic location in the Asia-Pacific region and a network of 17 established free trade agreements, Vietnam aims to become a reliable partner and a gateway for EFTA businesses seeking to expand their presence in ASEAN and other regional markets.

This would create opportunities for long-term investment, production and business cooperation, bringing mutual benefits to enterprises on both sides.

Ms. Nguyen Thi Hoang Thuy, Trade Counsellor of Vietnam in Sweden, concurrently accredited to Denmark, Norway, Iceland and Latvia, stated that the Vietnam–EFTA FTA goes beyond a conventional tariff-reduction agreement.

It sends a clear message reaffirming Vietnam’s consistent commitment to deeper international economic integration, diversification of markets and partners, and the enhancement of the quality of trade relations with advanced economies.

According to Ms. Nguyen Thi Hoang Thuy, businesses should recognize not only the opportunity to increase exports but also the opportunity to upgrade their own capabilities.

Although EFTA markets impose exceptionally high standards, these requirements are fully aligned with Vietnam’s new development orientation, which emphasizes higher value added, improved growth quality and deeper participation in sustainable supply chains.

Key Provisions of the Agreement

The Vietnam–EFTA Free Trade Agreement is a comprehensive FTA with a high level of commitments, covering a broad range of areas, including trade in goods and services, rules of origin, investment, intellectual property rights, competition, trade remedies, government procurement, and trade and sustainable development.

The Agreement also includes provisions on small and medium-sized enterprises (SMEs), cooperation and capacity building to help the parties effectively capitalize on the opportunities arising from the Agreement.

Trade in Goods and Tariff Liberalization

Under the Agreement, EFTA member states commit to maintaining the complete elimination of import tariffs on industrial and fishery products originating from Vietnam upon the Agreement’s entry into force.

For its part, Vietnam will reduce and eliminate most import duties on industrial and fishery products originating from EFTA within a maximum period of 11 years.

For agricultural products, the parties have agreed on market-access schedules reflecting their respective trade interests and the sensitivity of particular products.

Certain key EFTA exports, including cheese, coffee, chocolate, baby food and food supplements, will benefit from zero import tariffs when entering Vietnam under a phase-out schedule of up to 16 years.

At the same time, EFTA will grant Vietnam preferences comparable to those provided under its recently concluded FTAs.

Rules of Origin

The Agreement establishes a comprehensive system of rules of origin to ensure that products benefiting from preferential tariffs genuinely originate in the participating countries.

One notable feature is the cumulation of origin among EFTA member states and Vietnam.

The Agreement also permits extended cumulation for non-agricultural materials originating from ASEAN or EU countries that have preferential trade agreements with EFTA.

In addition, it sets out product-specific origin criteria, methods of origin certification, and rules governing processing and manufacturing operations.

Customs Procedures and Trade Facilitation

The parties commit to simplifying and modernizing customs procedures, strengthening transparency, applying international standards and fully implementing their commitments under the World Trade Organization’s Trade Facilitation Agreement.

Trade Remedies

The Agreement reaffirms the rights and obligations of the parties under WTO agreements on anti-dumping, countervailing measures and safeguards.

The parties also commit to greater transparency, consultations before applying trade remedies, and efforts to limit the use of anti-dumping measures in bilateral trade.

Furthermore, the Agreement establishes a bilateral safeguard mechanism to address situations in which increased imports cause serious injury to domestic industries.

Technical Barriers to Trade and Sanitary and Phytosanitary Measures

The Agreement establishes cooperation mechanisms to reduce technical barriers to trade and sanitary and phytosanitary barriers.

The parties commit to strengthening transparency, exchanging information, establishing contact points and promoting the development of technical regulations based on scientific evidence and international standards.

Trade in Services

The chapter on trade in services builds upon the WTO General Agreement on Trade in Services (GATS), while providing for deeper commitments.

It includes provisions on national treatment, regulatory transparency, payments and transfers, together with specific annexes addressing financial services, telecommunications, international maritime transport and the movement of natural persons.

Both sides commit to market-access liberalization at levels equivalent to or higher than their existing WTO commitments across a range of service sectors.

Investment

The Agreement provides for national treatment of investors from the participating countries in various non-service sectors under a positive-list approach.

Sectors such as agriculture, mining and manufacturing are opened to investment, subject to certain exceptions concerning land-use rights or investment screening.

At the same time, the Agreement reaffirms each country’s right to adopt policies to protect public health and the environment and address climate change.

Intellectual Property Rights

The Agreement contains comprehensive provisions on the protection and enforcement of intellectual property rights, including copyright, trademarks, patents, industrial designs, geographical indications, trade secrets and border enforcement measures.

The parties reaffirm their commitment to fully implementing the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and encourage participation in additional international treaties relating to intellectual property.

Government Procurement

The government procurement chapter seeks to enhance transparency, promote electronic procurement and strengthen cooperation among the parties.

The Agreement also lays the groundwork for subsequent negotiations on opening government procurement markets and emphasizes the role of public procurement in sustainable development and support for SMEs.

Competition

The parties agree to promote a fair competitive environment by preventing anti-competitive practices, including exclusive arrangements and abuse of dominant market positions.

The Agreement also establishes cooperation and consultation mechanisms through a Joint Committee to address issues arising during implementation.

Trade and Sustainable Development
The Agreement includes a dedicated chapter on sustainable development, under which the parties commit to fully implementing international treaties relating to labour and the environment.

On labour matters, the parties reaffirm their commitments under International Labour Organization (ILO) conventions, promote gender equality and combat discrimination.

On environmental matters, the parties commit to implementing the Paris Agreement on climate change, conserving biodiversity and sustainably managing natural resources.

Cooperation and Capacity Building
The Agreement establishes a framework for technical cooperation to help the parties make better use of the opportunities arising from the FTA through capacity-building activities, knowledge sharing and technical assistance.
Cooperation activities will be periodically reviewed by the Joint Committee.

Support for Small and Medium-Sized Enterprises

The Agreement emphasizes support for SMEs in accessing information on markets, trade regulations and business opportunities through publicly accessible English-language information portals.

The parties will also strengthen cooperation and exchange experiences in developing policies to help SMEs effectively benefit from the Agreement.

Institutional Arrangements and Dispute Settlement

The Agreement establishes a Joint Committee comprising representatives of all participating parties to oversee implementation and promote the further development of the Agreement.

For disputes arising during implementation, the Agreement provides mechanisms for consultation, mediation and arbitration.

If consultations fail to resolve a dispute, it will be referred to an arbitral tribunal composed of three arbitrators, in accordance with the procedures stipulated in the Agreement.

General Secretary and President To Lam’s ongoing State visit to Denmark is opening up new prospects for the two countries to jointly create new forms of cooperation and value built on a foundation of sustainability.

In an exclusive interview with Tuoi Tre, Ms. Nguyen Thi Hoang Thuy, Vietnam’s Trade Counsellor in Sweden, concurrently accredited to Denmark, Norway, Iceland and Latvia, emphasized that economic cooperation between Vietnam and Denmark is underpinned by a longstanding friendship and political trust built over many decades.

“This continuity and steady development is a distinct advantage of Vietnam–Denmark relations, providing a strong foundation of mutual trust, established cooperation mechanisms, experience in project implementation and a substantial presence of businesses from both countries,” Ms. Thuy emphasized.

Transforming the Approach to Cooperation: From Assistance to Co-Creation of New Value

Q: What are your expectations for this particularly significant State visit in terms of promoting cooperation and further deepening bilateral relations?

The State visit to Denmark by General Secretary and President To Lam is particularly significant, not only because it coincides with the 55th anniversary of diplomatic relations between Vietnam and Denmark (1971–2026), but also because the two countries are facing new opportunities for cooperation amid global economic uncertainties, while both place a high priority on sustainable development, science and technology, and innovation.

Vietnam–Denmark relations have undergone a fundamental qualitative transformation. This was clearly reflected in General Secretary and President To Lam’s policy address at the University of Copenhagen on October 19, in which he emphasized the need to transform the approach to economic cooperation, moving from assistance towards co-creation and generating new value for both countries.

I believe this is an extremely important direction for Vietnam–Denmark trade and investment cooperation in the coming period. I expect the visit to provide momentum for three major shifts.

First, shifting from increasing trade turnover to improving quality and added value.

Beyond expanding trade in traditional products, the two countries can strengthen cooperation in product development, processing technologies, design, logistics and distribution systems.

The objective should not simply be to sell more goods, but to enable Vietnamese enterprises to participate more deeply in higher-value supply chains.

Second, moving from cooperation on individual green projects towards the development of green industrial value chains.

Denmark has world-leading strengths in renewable energy, particularly wind power, energy-efficient technologies, maritime industries, environmental solutions and the circular economy.

Vietnam, meanwhile, has a large market, increasingly developed manufacturing capabilities and a strong need to transform its growth model.

Combining these strengths could create new industries and services, ranging from renewable energy equipment manufacturing and green logistics to sustainable food processing and emission-reduction solutions for industrial production.

Third, moving beyond attracting investment capital to attracting technology, knowledge and management capabilities.

The value of cooperation with Denmark lies not only in the volume of investment capital but also in the technological, environmental and corporate governance standards, as well as the innovation capabilities, that Danish investors bring.

These are essential factors for Vietnam to improve labour productivity and enhance its position in global value chains.

From High-Quality Investment to Upgrading Sustainable Value Chains

Q: Vietnam is focusing on attracting high-quality investment. What opportunities do you see for promoting Danish investment during this State visit?

The potential for investment cooperation between Vietnam and Denmark is considerable, particularly as Vietnam’s development orientation based on science and technology, innovation and green transition closely aligns with and complements Denmark’s strengths.

In renewable energy and industries supporting the energy transition, for example, Denmark has world-leading expertise in wind power, electricity system management, energy efficiency and emission-reduction technologies, while Vietnam has substantial demand for clean energy and green industrial development.

In my view, cooperation should not be limited to investment in power generation projects. It should expand into equipment manufacturing, supporting industries, logistics, technical services, operation and maintenance, thereby gradually establishing renewable energy supply chains in Vietnam.

Second, in high technology, semiconductors and innovation, Denmark has strengths in scientific research, quantum technologies, photonics, sensors and industrial electronics, which can complement Vietnam’s ambitions to develop its semiconductor industry.

Third, biotechnology, pharmaceuticals, medical devices and the food industry offer considerable potential for cooperation. Denmark’s research capabilities, technology and management expertise can be combined with Vietnam’s market, human resources and manufacturing capacity to develop high-value-added projects.

I expect the visit to strengthen Danish investors’ confidence, promote new investment projects and encourage corporations already operating in Vietnam to expand their activities and develop stronger linkages with domestic enterprises.

Q: Trade and import-export activities are also considered to have significant potential. What recommendations would you offer businesses seeking to capitalize on these opportunities?

Vietnamese enterprises need to shift from looking for markets for their existing products to studying market demand and developing products that meet specific customer needs.

They should proactively comply with the rules of origin under the EU–Vietnam Free Trade Agreement (EVFTA), as well as technical, environmental and traceability requirements.

At the same time, businesses should focus on building credibility and developing long-term partnerships in design, technology and product development to participate more deeply in value chains.

In the Danish market, sustainable competitive advantage does not lie in offering the lowest price, but rather in quality, reliability and the ability to meet the market’s high standards.

What matters most after the visit is translating high-level orientations and agreements into concrete projects, partnerships and business opportunities.

This is also the direction that the Vietnam Trade Office will continue to pursue: integrating trade promotion with investment, technology and industrial development, so that Vietnam–Denmark cooperation not only expands in scale but also generates greater added value and new competitive capabilities for the economy.

Energy Cooperation: A Key Highlight

On the occasion of General Secretary and President To Lam’s State visit to Denmark, one noteworthy area of cooperation is the exchange of a Memorandum of Understanding (MoU) on energy cooperation between Vietnam’s Ministry of Industry and Trade and Denmark’s Ministry of Climate, Energy and Utilities, linked to the Vietnam–Denmark Energy Partnership Programme for the 2026–2030 period.

Key areas of cooperation include long-term energy planning, renewable energy integration, industrial energy efficiency, offshore wind power and enhancing the flexibility of the electricity system.

According to Ms. Thuy, cooperation in renewable energy should focus not only on investment projects but also on developing supporting industries, transferring technology, training human resources and strengthening Vietnamese enterprises’ participation in supply chains.

Thank you very much for sharing your insights.

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