It took fourteen years of talks, but on Sunday the pens finally came out in Hanoi. Vietnam and the four EFTA states – Switzerland, Norway, Iceland and Liechtenstein – put their names to a broad trade pact, VEFTA for short, with party chief and head of state To Lam looking on.
Trade minister Le Manh Hung put his signature on the text for Vietnam. The European side sent an unusually senior line-up for a group of small economies: Swiss President Guy Parmelin, Liechtenstein’s head of government Brigitte Haas, Icelandic Foreign Minister Þorgerður Katrín Gunnarsdóttir and Norwegian State Secretary Astrid Bergmål.
The deal goes well beyond tariffs. It also sets rules for services, investment, intellectual property, public tenders, competition and sustainable development, and includes a chapter on small and medium-sized firms. For Norway the headline is fish. Today Vietnamese customs levy as much as 15 percent on fish such as salmon and mackerel from Norway; salmon will enter duty-free as soon as the treaty takes effect, while mackerel duties will disappear over three years. Oslo expects about half of its exports to Vietnam to be tariff-free from day one and more than 98 percent within seven years.
Vietnam, for its part, hopes to sell more seafood, shoes, clothing and electronics to some of the richest consumers in Europe, and to draw in machinery, pharmaceuticals and know-how in return. Hanoi’s trade ministry put two-way trade last year at 4.8 billion euros, gold shipments to Switzerland excluded, with Vietnam running a surplus of 2.5 billion. Swiss companies already back 234 projects in the country worth more than 2.4 billion dollars, Norwegian ones 62 projects.
For an export-driven economy that wants to spread its sales across more markets, every new partner counts. The agreement still has to be ratified on both sides before the first tariff cuts apply, and Vietnamese officials concede that exporters will have to meet demanding European standards to profit from it.
