Vietnam's Free Trade Agreements: How They Affect Product Sourcing
Vietnam has 17 active free trade agreements with more than 50 countries, including some of the world's largest economies. For businesses sourcing products from Vietnam, these agreements directly affect landed costs by reducing or eliminating import tariffs when goods move between Vietnam and its FTA partner countries.
Vietnam's total trade reached over $930 billion in 2025, with exports alone hitting $475 billion, up 17% year over year. That growth is not accidental. Vietnam's FTA network is one of the most extensive in Southeast Asia, connecting the country to markets across Asia-Pacific, Europe, the Americas, and the Middle East. For sourcing buyers, understanding which agreements exist and how they work is practical knowledge that affects pricing, supplier selection, and where your products can be shipped competitively.
Below is a complete breakdown of every active FTA, what is currently under negotiation, and what these agreements actually mean when you are sourcing products.
Updated Febrary 23, 2026
Vietnam's Major Free Trade Agreements
These are the FTAs with the largest impact on international sourcing. Each one opens significant market access and tariff reductions that directly affect buyers importing from or through Vietnam.
CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership)
The CPTPP connects Vietnam with 10 other countries across the Pacific Rim: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, and Singapore. In effect, since January 2019, it has eliminated approximately 95% of tariffs on goods traded between member countries. For sourcing buyers, the CPTPP is particularly relevant if you are importing Vietnamese-made goods into Canada, Australia, Japan, or Mexico, as it provides preferential tariff rates that non-member countries do not receive. The agreement also includes provisions on labor standards and intellectual property, which have pushed some Vietnamese manufacturers to upgrade their compliance practices.
EVFTA (EU-Vietnam Free Trade Agreement)
The EVFTA, in effect since August 2020, is one of Vietnam's most impactful agreements. It commits the EU and Vietnam to eliminating over 99% of customs duties on each other's goods over a phased timeline. For European buyers, this means Vietnamese textiles, footwear, electronics, and furniture enter the EU at significantly reduced rates. Vietnam posted a trade surplus of $38.6 billion with the EU in 2025, driven largely by these preferential terms. The agreement also includes commitments on sustainable development, environmental protection, and labor rights, making it one of the more comprehensive FTAs Vietnam has signed. If you are sourcing from Vietnam and selling into EU markets, the EVFTA is likely the single most important agreement to understand.
RCEP (Regional Comprehensive Economic Partnership)
RCEP is the world's largest trade agreement by GDP coverage, linking the 10 ASEAN member states with China, Japan, South Korea, Australia, and New Zealand. In effect, since January 2022, the RCEP has covered roughly 30% of global GDP. Its primary value for sourcing is not dramatic tariff cuts (many member countries already had existing FTAs), but rather unified rules of origin and simplified customs procedures across the bloc. This makes it easier to build supply chains that span multiple RCEP countries. If your product uses components from China or South Korea that are assembled in Vietnam, RCEP's cumulative rules of origin can help the finished goods qualify for preferential treatment.
UKVFTA (UK-Vietnam Free Trade Agreement)
Following Brexit, the UK and Vietnam signed the UKVFTA to maintain trade continuity. The agreement entered into force in May 2021. The UK immediately eliminated tariffs on 85.6% of Vietnamese tariff lines, rising to 99.2% by 2027. For UK-based buyers, this provides significant tariff advantages on imports of Vietnamese clothing, footwear, seafood, and furniture.
VKFTA (Vietnam-Korea Free Trade Agreement)
Signed in 2015, the VKFTA complements the broader ASEAN-Korea agreement with deeper bilateral commitments. South Korea is one of Vietnam's largest trade partners, with bilateral trade heavily driven by electronics components flowing into Vietnamese assembly operations. Samsung alone produces a massive share of its global smartphone output in Vietnam. For buyers, the relevance here is indirect but significant: Korea's investment in Vietnamese manufacturing has built factory infrastructure and quality standards that benefit all buyers sourcing from Vietnam.
VJEPA (Vietnam-Japan Economic Partnership Agreement)
In effect since 2009, the VJEPA has reduced tariffs and promoted economic cooperation between Vietnam and Japan. Japan has been one of Vietnam's largest foreign investors for decades, and this agreement reinforced that relationship. Japanese-invested factories in Vietnam tend to operate at high quality standards, and the VJEPA's tariff provisions make it cost-effective to move goods between the two countries.
VIFTA (Vietnam-Israel Free Trade Agreement)
Vietnam's newest FTA was signed in July 2023 and in force since November 2024. Vietnam became the first Southeast Asian country to sign an FTA with Israel. The agreement will ultimately remove duties on at least 86% of Vietnamese products and 93% of Israeli products. While bilateral trade is relatively small (around $2.2 billion annually), the agreement signals Vietnam's continued push to expand its trade network beyond traditional partners.
Vietnam's ASEAN-Based Trade Agreements
As a member of ASEAN, Vietnam is automatically a party to several regional and interregional trade agreements negotiated by the bloc. These agreements function alongside Vietnam's bilateral FTAs.
AFTA (ASEAN Free Trade Area)
AFTA has been in place since 1992, with Vietnam joining ASEAN in 1995. It reduces tariffs on most goods traded among the 10 ASEAN member states to 0%-5%. For sourcing buyers, AFTA is most relevant when your supply chain involves components or materials moving between Vietnam and other ASEAN countries, such as Thailand, Indonesia, or Malaysia, before final export.
ACFTA (ASEAN-China Free Trade Area)
One of the most commercially significant ASEAN agreements, ACFTA governs trade between all ASEAN members and China. Given that China is Vietnam's largest source of imports ($186 billion in 2025), this agreement directly affects the cost of raw materials and components used by Vietnamese factories. When you source a finished product from Vietnam, the input costs are often shaped by ACFTA tariff rates on Chinese materials.
AKFTA (ASEAN-Korea Free Trade Area)
This agreement reduces trade barriers between ASEAN and South Korea. It works alongside the bilateral VKFTA but covers the broader ASEAN-Korea relationship.
AJCEP (ASEAN-Japan Comprehensive Economic Partnership)
A broad agreement covering trade in goods, services, investment, and economic cooperation between Japan and all ASEAN countries. It supplements the bilateral VJEPA.
AANZFTA (ASEAN-Australia-New Zealand Free Trade Area)
Links ASEAN with Australia and New Zealand, eliminating tariffs on 90% of goods traded between the parties. Relevant for Australian and New Zealand buyers sourcing from Vietnam.
ASEAN-India Free Trade Area
Signed in 2009 and in effect since 2010, this agreement provides preferential tariff access between ASEAN countries and India. India's trade with Vietnam has been growing, though the bilateral volumes remain smaller than with other FTA partners.
Other Bilateral Trade Agreements
Vietnam-Chile Free Trade Agreement
In effect, since 2014, this agreement has reduced tariffs on trade between Vietnam and Chile. Bilateral trade is relatively modest, but the agreement provides a foothold for Vietnamese goods in South American markets.
Vietnam-EAEU Free Trade Agreement
This FTA links Vietnam with the Eurasian Economic Union (Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan), which has been in effect since 2016. It was notable as Vietnam's first FTA with a European trade bloc, though trade volumes have been affected by geopolitical developments.
Vietnam-Cuba Free Trade Agreement
Signed in 2018 and in effect since 2020, this agreement reflects historical diplomatic ties. Commercial significance for sourcing buyers is limited.
US-Vietnam Bilateral Trade Agreement
Signed in 2000 and in force since 2001, the BTA normalized trade relations between the US and Vietnam. It is not technically a free trade agreement, but it established Most Favored Nation (MFN) status and laid the groundwork for Vietnam's current position as one of the largest exporters to the US market. In 2025, the US remained Vietnam's largest export market, accounting for $153.2 billion. In October 2025, the US and Vietnam reached a framework for a new Agreement on Reciprocal, Fair, and Balanced Trade, which is still being finalized. The US currently maintains a 20% reciprocal tariff on Vietnamese imports. Trade policy between the US and Vietnam is actively evolving, and buyers should check the latest rates and developments for their specific product categories.
Agreements Under Negotiation
Vietnam's FTA network continues to expand. Key agreements currently in progress include the Vietnam-EFTA Free Trade Agreement (with Switzerland, Norway, Iceland, and Liechtenstein), the ASEAN-Canada Free Trade Agreement, and the continuing finalization of the US-Vietnam reciprocal trade framework announced in late 2025. Each of these, if completed, would further expand the range of markets where Vietnamese-made goods receive preferential treatment.
What Vietnam's FTAs Mean for Product Sourcing
If you are sourcing products from Vietnam, FTAs matter because they can meaningfully reduce your landed cost. When goods move from Vietnam to an FTA partner country, the tariff rate on those goods is often lower, sometimes zero, compared to the standard rate applied to non-FTA countries. The actual savings depend on your specific product's HS code, the destination country, and whether the product meets the rules of origin.
Rules of origin are the key detail that determines whether your product qualifies for FTA tariff rates. Each agreement has its own criteria for what counts as "made in Vietnam." This typically involves thresholds for local value-added, changes in tariff classification, or specific processing requirements. A product assembled in Vietnam using 90% Chinese components may not qualify for EVFTA preferential rates, for example, even though it ships from a Vietnamese port. Understanding these rules before you place orders can prevent surprises at customs.
FTAs also encourage higher manufacturing standards. Agreements like the EVFTA and CPTPP include provisions on labor practices, environmental protection, and intellectual property. Factories that export to FTA partner countries often invest in compliance upgrades to meet these requirements, which benefits all buyers working with those manufacturers.
That said, FTAs are one factor among many in a sourcing decision. The right factory, the right quality controls, clear communication, and reliable on-the-ground support matter just as much as tariff rates. Vietnam's FTA network makes it a more competitive sourcing destination, but successfully finding the right manufacturer still requires understanding the local landscape. If you are comparing Vietnam with China or exploring Vietnam for the first time, our Vietnam sourcing guide covers the practical steps, and our supplier resources guide can help you start identifying factories.
Source Products from Vietnam with Cosmo Sourcing
Vietnam's 17 free trade agreements make it one of the most connected manufacturing destinations in the world, but navigating the sourcing process still takes local expertise. Cosmo Sourcing has been helping businesses find manufacturers in Vietnam since 2012. We work on a transparent, flat-fee model, which means we are not taking a commission on your order. We get you quotes directly from 2 to 6 factories, arrange factory visits, and manage quality control so you can make informed decisions with full visibility.
If you are ready to explore what Vietnam can manufacture for your business, get in touch.
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