Vietnam signed a free trade agreement with the European Free Trade Association (EFTA) in Hanoi on Sunday, October 18. EFTA's four members, Switzerland, Norway, Iceland, and Liechtenstein, are European states outside the EU. Minister of Industry and Trade Lê Mạnh Hùng signed for Vietnam, and Swiss President Guy Parmelin and Liechtenstein Prime Minister Brigitte Haas were among EFTA's signatories. Tô Lâm, Vietnam's party general secretary and state president, attended the ceremony (EFTA, Oct 18).

Signing starts the ratification clock: each of the five countries must now approve the text at home. No entry-into-force date is set, but Hùng has asked the EFTA states to ratify in time for early 2027, and Parmelin promised to push Swiss ratification forward (VietnamPlus, Oct 19).

On tariffs, the agreement asks more of Vietnam than of EFTA. After entry into force, Vietnam cuts duties on most EFTA industrial and seafood products in stages, with the last duties reaching zero within 11 years, while the EFTA states commit to keeping theirs on Vietnamese industrial goods and fish at zero (EFTA factsheet). Rules of origin, the tests a product must pass to qualify as Vietnamese, also credit non-agricultural inputs from the EU, or from ASEAN members with a preferential agreement in force.

At the three-day Swiss-Viet Economic Forum that followed the signing, I heard speakers talk less about tariffs than about evidence. On the supply-chain panel, SGS, the Swiss testing and certification group, described three gaps between Vietnamese suppliers and European buyers: meeting the standard, documenting it, and answering demands beyond the product, from ESG data to carbon reporting. A senior trade ministry official said a zero tariff means little if a product fails safety, environmental, or traceability rules.

Switzerland and Liechtenstein have charged no duty on industrial imports from anywhere since January 2024 (SECO), so for factory goods the agreement locks in access Vietnamese exporters already have there. Origin rules still decide who benefits on farm and fish goods and on EFTA products entering Vietnam as its duties fall. A Swiss or Norwegian buyer writing 2027 contracts should ask whether a Vietnamese supplier can produce the compliance files behind its product. For Vietnamese-owned exporters, especially smaller ones, the months before entry into force are the time to build them.

Hùng set his government a benchmark when he told the forum that the agreement's success “will not be measured by the number of tariff lines cut, but by the projects implemented, the technology transferred, the supply chains formed, and the competitiveness gained” (translated from Vietnamese). None of that can be counted before entry into force. Until then, I'll be watching how fast the five ratifications move and whether Hanoi's promised support for domestic firms arrives before the preferences do.

Correction: our July 15 note said the EFTA states would remove duties on Vietnamese industrial goods and fish when the agreement takes effect. The agreement commits them to keeping those duties at zero.

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Published by Kimmi Võ, Mangrove Strategies.

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