Vietnam – EU: From 35 Years of Cooperation to a New Wave of Strategic Investment (Part 1)
- Virtus Prosperity
- 6 days ago
- 5 min read
Amid a rapidly shifting global landscape in supply chains, green energy, and digital transformation, Vietnam is emerging as a strategic investment destination for the European Union (EU). After 35 years of diplomatic relations, Vietnam and the EU have built a solid foundation of cooperation spanning trade, investment, and sustainable development.
The EU–Vietnam Free Trade Agreement (EVFTA), together with the EU’s Global Gateway initiative, not only opens broader access for Vietnamese goods to the European market but also establishes a transparent legal framework that promotes high-quality investment flows from the EU into Vietnam. With its political stability, young workforce, and strategic geographic location, Vietnam is increasingly becoming a top choice for European investors seeking long-term opportunities.
The 35-Year Journey of Vietnam–EU Relations
1. Key Milestones
The more than 35-year journey of relations between Vietnam and the European Union has been shaped by a series of significant milestones, reflecting continuous development from initial cooperation to a comprehensive strategic partnership.
28/11/1990 – Establishment of diplomatic relations
This marked the official beginning of bilateral relations, laying the foundation for cooperation in economic, trade, and development fields.
June 1996 – Vietnam–EU Framework Cooperation Agreement enters into force
This agreement created the first legal basis for comprehensive cooperation, particularly in trade, investment, and development assistance.
July 1997 – Vietnam joins the ASEAN–EU Cooperation Agreement
Participation in this regional mechanism enabled Vietnam to deepen its integration into EU–Southeast Asia cooperation networks and enhance its regional standing.
June 2012 – Signing of the Partnership and Cooperation Agreement (PCA)
The PCA marked a major transition from development cooperation to a comprehensive partnership, expanding cooperation into politics, security, environment, and science and technology.
October 2016 – PCA enters into force
The implementation of the PCA reinforced the long-term cooperation framework, strengthened mutual trust, and laid the groundwork for deeper trade and investment agreements.
30/6/2019 – Signing of EVFTA and EVIPA
Vietnam and the EU signed two landmark agreements: the EVFTA (Free Trade Agreement) and the EVIPA (Investment Protection Agreement), elevating bilateral economic relations to a higher standard.
01/8/2020 – EVFTA enters into force
The EVFTA has significantly boosted bilateral trade, reduced tariffs, and improved market access. The EVIPA is still awaiting ratification by several EU member states.
2024 – First Vietnam–EU Summit in Hanoi
This event marked progress in high-level dialogue and reaffirmed both sides’ commitment to strengthening strategic cooperation.
January 2026 – Upgrade to a Comprehensive Strategic Partnership
A landmark milestone, making Vietnam the EU’s first comprehensive strategic partner in ASEAN, reflecting the high level of trust and strategic importance of the relationship.
March 2026 – First “EU–Vietnam Global Gateway Business and Investment Forum” held in Hanoi
This forum highlights a clear shift from policy cooperation to investment promotion and business connectivity, particularly amid global supply chain restructuring.
2. Key Achievements
After 35 years of development, Vietnam–EU relations have achieved comprehensive results across multiple areas, including trade, investment, development cooperation, and strategic sectors.
First and foremost, bilateral trade remains the most important pillar. Two-way trade has grown impressively, reaching approximately EUR 67 billion in 2024 and nearly USD 300 billion cumulatively over more than three decades. The EU is currently one of Vietnam’s largest and most stable export markets, while Vietnam has become the EU’s largest trading partner in ASEAN and its 16th largest globally. Notably, since the EVFTA came into effect in 2020, bilateral trade has not only expanded in scale but also improved in structure. The elimination of most tariffs has facilitated key export sectors such as textiles, footwear, electronics, and agro-fishery products in increasing their market share in Europe.
Beyond trade, investment cooperation has also recorded significant achievements. The EU is the sixth-largest investor among 153 countries and territories investing in Vietnam. It currently has around 2,500 active investment projects in Vietnam, with total registered capital reaching USD 32.39 billion, mainly concentrated in manufacturing, energy, and high-quality services. A distinctive feature of EU investment is its strong linkage with technology transfer, modern governance standards, and sustainable development, rather than purely economic returns. The signing of the EVIPA further enhances investor confidence by strengthening investment protection and improving legal transparency. Conversely, Vietnam currently has 98 investment projects in the EU, with total capital of USD 434.88 million.
In terms of development cooperation, EU was once one of Vietnam’s largest ODA donors during the early stages of its integration. EU funding and technical assistance have played a crucial role in promoting institutional reforms, poverty reduction, infrastructure development, and human resource quality improvement. These contributions have laid a strong foundation for Vietnam’s deeper integration into the global economy and enhanced national competitiveness.
In addition, Vietnam–EU relations are increasingly expanding into strategic areas such as science and technology, education and training, and sustainable development. Both sides have implemented numerous cooperation programs in innovation, digital transformation, energy transition, and climate change response. These areas not only reflect emerging cooperation trends but also demonstrate the growing depth of engagement in long-term and global issues.
Overall, the achievements of the past 35 years show a strong transition from traditional development cooperation to a comprehensive economic and investment partnership, providing a solid foundation for the next phase of strategic cooperation.
3. Strategic Significance
Building on these achievements, Vietnam–EU relations are gaining increasing strategic importance, aligned with global trends toward supply chain diversification and sustainable development.
For Vietnam, the EU is a key partner in diversifying export markets and economic ties, reducing dependence on traditional markets. Participation in high-standard frameworks such as the EVFTA and EVIPA also drives institutional reforms and alignment with international standards.
Conversely, Vietnam is playing an increasingly important role in the EU’s strategy in the Asia–Pacific region. With its favorable geo-economic position, stable political environment, and deep integration, Vietnam is seen by the EU as a reliable partner for expanding economic cooperation and strengthening regional supply chains. This aligns with the EU’s broader strategy of increasing its presence in dynamic emerging economies.
Moreover, Vietnam–EU relations carry significant importance in advancing sustainable development goals. Both sides are stepping up cooperation in areas such as energy transition, climate change response, digital economy, and innovation—key pillars in the long-term development strategies of both Vietnam and the EU, and indicative of a shift beyond traditional trade frameworks.
The official upgrade to a Comprehensive Strategic Partnership in January 2026 stands as a clear testament to the growing trust and alignment between the two sides. This new framework provides a strong foundation for expanding cooperation across multiple sectors, while enhancing coordination at both policy and business levels.
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