VIFTA Agreement: Improving institutions, expanding opportunities for cooperation between Vietnam and Israel.

Proactively internalize and improve the legal framework.

According to Ms. Nguyen Thi Lan Phuong, Deputy Head of the WTO and Trade Negotiation Department, Multilateral Trade Policy Division (Ministry of Industry and Trade), even before the agreement came into effect, the Ministry of Industry and Trade had closely coordinated with the Ministry of Finance and other relevant ministries and agencies to review the domestic legal system to internalize the commitments of VIFTA.

Specifically, the Ministry of Finance has submitted to the Government a Decree on special preferential import tariffs applicable to goods originating from Israel. The Ministry of Industry and Trade has also issued a Circular regulating the certification of origin of goods, aiming to ensure that Israeli goods imported into Vietnam fully comply with regulations on procedures, documentation, and origin requirements and enjoy preferential tariffs under the agreement.

Conversely, Israel has also incorporated the commitments in VIFTA into its domestic laws, creating favorable conditions for Vietnamese goods exported to Israel to enjoy preferential tariffs while complying with rules of origin, technical barriers to trade (TBT), and sanitary and phytosanitary (SPS) measures.

Issue an action plan, focusing on three major pillars.

One of the key highlights in the implementation of VIFTA is the Government's issuance of the Action Plan for the Implementation of the Vietnam-Israel Free Trade Agreement, based on the synthesis and incorporation of opinions from 14 ministries and agencies and the Vietnam Federation of Commerce and Industry (VCCI).

According to Ms. Nguyen Thi Lan Phuong, the action plan focuses on three key aspects:

Firstly, disseminating information about the agreement is crucial. The Ministry of Industry and Trade, through the Multilateral Trade Policy Department and the Foreign Market Development Department, in coordination with trade offices, localities, and industry associations, will intensify efforts to provide businesses with information about the benefits, commitments, and opportunities from VIFTA, helping them understand and effectively utilize the agreement.

Secondly, continue to improve institutions and laws. Ministries, sectors, and localities are required to review relevant legal documents to ensure they are consistent with the roadmap and commitments of the agreement; and at the same time, promptly propose amendments to regulations that are still causing difficulties, creating more favorable conditions for trade and investment activities of businesses in both countries.

Thirdly, enhancing competitiveness and developing human resources are key factors for businesses to effectively utilize VIFTA. Accordingly, the Ministry of Industry and Trade prioritizes developing specific support programs for businesses participating in FTAs in general and the Israeli market in particular; strengthening business connections, and promoting deeper participation in regional and global supply chains and value chains.

In particular, the Ministry of Industry and Trade focuses on promoting cooperation between Vietnamese businesses and Israeli investors in high-tech fields, high-tech agriculture, deep processing, etc., thereby both increasing the added value of Vietnamese goods and promoting sustainable development of bilateral trade and investment.

VIFTA – a significant milestone in Vietnam-Israel relations.

From a market perspective, Mr. Le Thai Hoa, Commercial Counselor of the Vietnam Trade Office in Israel, stated that compared to many other FTAs that Israel has signed, the level of commitment in VIFTA is not necessarily high, but it has achieved a harmonization of interests and is in line with the wishes of both sides.

VIFTA is the first free trade agreement that Israel has signed with a Southeast Asian country, and Israel's third in Asia (after South Korea and the UAE). For Vietnam, this is the first bilateral free trade agreement with a partner in the Middle East-Africa region.

According to the agreement, Israel eliminated 92.7% of tariff lines, and Vietnam eliminated 85.8% of tariff lines by the end of the roadmap. Although a "traditional" agreement incorporating modern elements, VIFTA has created a strong impetus for bilateral trade and investment relations, contributing to promoting the exchange of goods and providing specific advantages and incentives for businesses in both countries.

New opportunities for businesses in both countries.

Amidst the continued volatility of global supply chains, Israel views Vietnam as a crucial "manufacturing hub" for diversifying its sources of goods. Conversely, the VIFTA opens opportunities for Vietnamese businesses to boost exports to the Israeli market, while also expanding cooperation in investment, science, and technology.

Currently, Israel is Vietnam's third largest trading partner and fourth largest export market in the Middle East; it is also the third largest investor from the Middle East in Vietnam. Conversely, Vietnam is also one of Israel's most important trading partners in Southeast Asia, giving Israel deeper access to the vast ASEAN market.

In the context of Israel not yet having finalized its FTA with China and exploring the possibility of negotiations with India and Japan, the signing and implementation of the VIFTA demonstrates Israel's particular emphasis on Vietnam's role and position in Asia and ASEAN. This also serves as an important foundation for the continued positive, substantive, and effective development of Vietnam-Israel economic, trade, and investment relations in the future.

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