Vietnam and Israel sign free trade agreement

More cooperation opportunities

The signing of the VIFTA resulted from the continuous efforts by both sides over the past seven years through 12 negotiation sessions and is even more meaningful in the context that the two countries are holding many practical activities to celebrate the 30th anniversary of the establishment of their diplomatic relations (July 12, 1993 - July 12, 2023). Israel has become the first West Asian country to sign an FTA with Vietnam, and Vietnam is the first Southeast Asian nation to have an FTA with Israel.

Minister of Industry and Trade Nguyen Hong Dien attends the meeting between Vietnamese Deputy Minister Tran Luu Quang and Israeli President Isaac Herzog

Israel is currently one of the leading trade, investment, and labor cooperation partners of Vietnam in West Asia. The economic structure of Vietnam and Israel is complementary to each other, and the import and export products of the two countries do not compete directly but complement each other instead. Therefore, the signing and implementation of the VIFTA will create favorable conditions for Vietnam to boost exports to Israel and access Israeli high-tech products, contributing to reducing production and business costs and improving the competitiveness of Vietnamese goods.

The agreement consists of 15 chapters and several appendices about trade in goods, services - investment, rules of origin, technical barriers to trade (TBT), sanitary and phytosanitary measures (SPS), customs, trade remedies, government procurement, and legal - institutional framework.

The agreement will ultimately remove duties for 92.7 percent of Israeli exports to Vietnam and 85.8 percent of Vietnamese exports to Israel. The two sides expect bilateral trade to grow remarkably and reach US$3 billion or higher levels in the near future. The VIFTA is also expected to help increase bilateral cooperation in investment, services, digital transformation, and technology.

The Vietnamese Ministry of Industry and Trade believes the agreement will help Vietnam promote exports to not only Israel but also other markets in the Middle East, North America and South Europe. Meanwhile, besides Vietnam with a population of nearly 100 million people, the VIFTA will create opportunities for Israeli goods and technologies to access other markets in ASEAN, the Asia-Pacific region, and major economies with which Vietnam has signed FTAs.

The VIFTA will facilitate Israeli investment in Vietnam and contribute to generating more jobs in areas of Israeli investors’ interest.

The Vietnamese delegation visits the Peres Center for Peace and Innovation - Photos: VGP

Government commitments

Within the framework of his recent visit to Israel, Deputy Prime Minister Tran Luu Quang had a meeting with Israeli businesses. At the meeting, Minister Nguyen Hong Dien told Israeli businesses about Vietnam’s foreign investment attraction policy and answered their questions.

Representatives of Israeli businesses praised the Vietnamese Government for the efforts to improve the business and investment environment, increase Vietnam’s FTAs with other countries and regions, and maintain high economic growth. They expressed their interest in procedures related to the establishment of companies with 100 percent foreign investment in Vietnam, and the VIFTA’s implementation roadmap. Israeli businesses also expressed the wish to receive the Vietnamese Government, ministries, sectors and localities’ support for their investment projects in Vietnam.

Deputy Prime Minister Tran Luu Quang emphasized that Vietnam and Israel are experiencing the best period of bilateral relations. He affirmed the Vietnamese Government’s commitments to supporting Israeli businesses’ efforts to overcome difficulties when investing in Vietnam.