According to the VIFTA Agreement, Israel will grant a 0% tariff quota for Vietnamese seafood and agricultural products... immediately after the Agreement comes into effect.
After 7 years and 12 negotiation sessions, on July 25, 2023, Vietnam - Israel signed a Free Trade Agreement and became the 16th free trade agreement between Vietnam and global partners.
The Vietnam - Israel Free Trade Agreement (VIFTA) is a comprehensive agreement, covering many areas of mutual interest to Vietnam and Israel such as trade in goods, services - investment, rules of origin, sanitary and phytosanitary measures, customs, government procurement...
According to the negotiation content in VIFTA, some agricultural products such as chicken eggs, meat, potatoes, carrots, cauliflower, mushrooms, honey, tuna, etc. are given tariff quotas by Israel with a tariff rate of 0%. Fashion items, processed footwear and finished products in HS groups 61-64 are mostly exempted from tariffs as soon as the agreement comes into effect, while fashion items and sports footwear are mostly subject to a tariff elimination roadmap within 3-5 years.
In particular, with the agreement reached in all chapters of the agreement, especially the strong commitment of both sides to increase the rate of trade liberalization with the overall liberalization rate by the end of the commitment roadmap of Israel being 92.7% of tariff lines while Vietnam is 85.8% of tariff lines, the two sides expect that two-way trade will have remarkable growth, soon reaching 3 billion USD and higher in the coming time.
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| On April 2, 2023, in Tel Aviv, Vietnam and Israel announced the conclusion of negotiations on the Free Trade Agreement between the two countries after 7 years and 12 negotiation sessions. Photo: Moit.gov.vn |
Mr. Le Thai Hoa - Commercial Counselor, Vietnam Trade Office in Israel - believes that, in addition to contributing to increasing two-way trade turnover, VIFTA is expected to be a "lever" to help strengthen cooperation between the two countries in investment, trade in services, digital transformation, technology...
Notably, Mr. Le Thai Hoa said that currently, businesses of the two countries are expressing active interest in the implementation of the VIFTA Agreement, creating an important legal framework for market opening and business activities as well as favorable conditions for goods of each side to penetrate each other's markets.
“Many Israeli businesses are increasingly interested in cooperating with the Vietnamese market and businesses, actively coming to Vietnam to seek sources of goods,” Mr. Le Thai Hoa informed and emphasized that seafood, agricultural products, footwear, textiles, etc. will be potential industries for businesses of both sides to increase investment cooperation.
According to the latest statistics, in the first 10 months of 2024, two-way trade between Vietnam and Israel reached 2.578 billion USD, up 12.92%; of which, Vietnam's exports to Israel reached 676 million USD, up 23.4% and imports from this market reached 1.902 billion USD, up 9.6% over the same period in 2023.
Vietnam currently has about 70 export items to Israel such as: Phones and components; seafood; footwear; cashew nuts; textiles... Notably, seafood is an important export item of Vietnam to this market and has a stable position, highly appreciated and favored by Israeli consumers.
In fact, Israel is Vietnam's largest seafood export market in the West Asia (Middle East) region and ranks 16th in the list of more than 100 seafood export markets of Vietnam, as of the end of October 2024.
Among the group of seafood products exported by Vietnam to Israel, tuna accounts for the majority. In the first 10 months of 2024, the export turnover of this item reached 56.7 million USD, an increase of 55.4% over the same period and accounting for 6.91% of the total tuna export turnover of the country. Next are frozen shrimp, frozen squid, tra fish...
Mr. Truong Dinh Hoe - General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP) - acknowledged that the tax reduction roadmap provided by the VIFTA Agreement will create great advantages for seafood exporting enterprises. Not only in the Israeli market, VIFTA is expected to open up cooperation opportunities with the potential Middle East region through the gateway of the United Arab Emirates (UAE).
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| The tax reduction roadmap provided by the VIFTA Agreement will create great advantages for seafood exporting enterprises. Photo: Kien Ung |
In addition to seafood, mobile phones, footwear of all kinds, cashew nuts, textiles, coffee... are also potential fields and industries that domestic enterprises can boost exports, because the Israeli market is stepping up its search for alternative sources of supply to the disrupted source from Türkiye.
It is expected that if the market situation does not have any sudden fluctuations, bilateral trade in 2024 may reach over 3.10 billion USD and exceed the target of 3.0 billion USD set at the Intergovernmental Committee Meeting between the two countries held in Hanoi on August 16, 2023; of which, Vietnam's exports will reach over 850 million USD, an estimated increase of 34.71% compared to 2023, and imports from Israel will reach about 2.25 billion USD.
However, according to Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan, the current import-export turnover is still not commensurate with the potential of the two countries. Therefore, in the future, the VIFTA Agreement will create conditions to enhance cooperation in trade, investment, tourism and many other exchange activities.
Deputy Minister Nguyen Sinh Nhat Tan believes that the VIFTA Agreement will be a launching pad to enhance trade and investment exchanges between the two countries in the coming time. At the same time, VIFTA will play an important role as a foundation to enhance bilateral trade, exchange and cooperation in areas where the two countries have strengths, contributing to the overall growth of the two economies.
Source: https://congthuong.vn/nganh-hang-nao-duoc-huong-loi-nhieu-nhat-khi-hiep-dinh-vifta-duoc-thuc-thi-363871.html
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