VIFTA opens room to boost trade, investment between Việt Nam and Israel

VIFTA opens room to boost trade, investment between Việt Nam and Israel

Under the trade deal, Israel eliminated more than 66 per cent of tariff lines immediately upon the agreement’s entry into force on November 27, 2024 and is set to raise its liberalisation level to nearly 93 per cent while Việt Nam has committed to eliminating 86 per cent of tariff lines.

Shrimp processed for export. Seafood remains Việt Nam’s key export product to Israel. — VNA/VNS Photo Tuấn Anh

The Việt Nam-Israel Free Trade Agreement (VIFTA) is providing major opportunities to boost trade and investment cooperation between the two countries, an online conference was told on Thursday.

Vietnamese Trade Counsellor to Israel Lê Thái Hòa said that in the first year of implementation, the agreement has delivered significant results.

Under the trade deal, Israel eliminated more than 66 per cent of tariff lines immediately when the agreement came into force on November 27, 2024 and is set to raise its liberalisation level to nearly 93 per cent, while Việt Nam has committed to eliminating 86 per cent of tariff lines.

The trade deal has allowed numerous key export products of Việt Nam, including seafood, footwear, fashion, coffee, cashew nuts, processed agricultural products and construction materials, to expand in the Israeli market.

Hòa said that Việt Nam’s exports to Israel is expected to reach US$880 million this year, up 10 per cent over 2024. Seafood remains Việt Nam’s key export product to Israel, accounting for about 12–13 per cent of Israel’s total seafood imports.

Hòa pointed out that Israeli consumers prefer fully processed and packaged products with high added value, which Vietnamese firms could capture to expand exports to this market.

He urged Vietnamese producers and exporters to make efforts to meet Israel’s requirements, including Kosher or Halal certification requirements as well as the EU or the US standards, for further expansion.

As VIFTA is the first FTA that Việt Nam has signed with a Middle Eastern country and the first FTA that Israel has concluded with an ASEAN member, there is significant room to promote bilateral economic and trade cooperation, Hòa said.

He forecast the bilateral trade could soon reach $5 billion from a projected $3.75 billion this year.

With regard to investment, Hòa cited statistics that Israel invested around $156 million into 45 projects in Việt Nam while Việt Nam invested $78 million in four projects in Israel.

A direct flight route connecting the two countries expected to be launched in January next year would facilitate bilateral trade and investment cooperation, he added.

According to Đỗ Thị Thuỷ Hương, deputy president of the Việt Nam Association for Supporting Industries, the VIFTA has opened significant opportunities to expand exports, access technology and participate in the supply chains with Israel, a high-tech economy.

Eterprises need support in market information, market requirements in order to take advantages of the trade deal to expand exports, Hương said.

Nguyễn Thị Lan Phương from the Multilateral Trade Policy Department under the Ministry of Industry and Trade urged Vietnamese firms to closely watch the market developments to ensure safety and take opportunities from the trade deal to boost trade with Israel.

The ministry is finalising a project to develop an ecosystem to take advantage of FTAs which will be submitted to the Government within this month, she said, to enable industries and enterprises to better grab opportunities from trade deals for exports.

Israel is the third largest trade partner of Việt Nam in West Asia while Việt Nam is one of the largest trade partner of Israel in the Southeast Asia. 

Bizhub