The largely diplomatic move entails no binding commitments but carries political weight at a time when the EU and Vietnam are seeking to deepen international ties as they both face up to higher levies on their exports to the United States.
The upgrade is "a historical milestone underlining the great achievements that the two sides have made," Vietnam's President Luong Cuong said at the start of a meeting in Hanoi with European Council President Antonio Costa.
A free trade agreement between Vietnam and the 27-country EU entered into force in 2020.
Costa, who arrived in Hanoi after the EU struck a major trade deal with India on Tuesday, said the upgraded partnership "highlights the importance we attach to the region and to Vietnam's growing role".
"At a moment when the international rules-based order is under threat from multiple sides, we need to start to stand side by side as reliable and predictable partners," Costa added.
The elevation of ties to Vietnam's highest level, the same as the United States, China and Russia, usually involves more frequent high-level meetings.
It is also expected to generate a stronger partnership, according to a joint statement adopted on Thursday, which says the two sides will explore and deepen co-operation in multiple sectors, including defence, critical minerals, semiconductors, transport and "trusted communications infrastructure", confirming a Reuters report.
Costa acknowledged different views with Vietnam, a long-time Russian partner, over the war in Ukraine and human rights.
But he added the two countries agree on their support of multilateralism and "the principles of independence, territorial integrity and sovereignty."
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