Generous tariff preferences, ample export potential.
VIFTA is a traditional free trade agreement with a fairly deep level of market opening commitments. Under the agreement, Israel will eliminate tariffs on over 90% of tariff lines, with approximately 65% removed immediately upon entry into force, and the remainder reduced over a period of 3 to 10 years.
Notably, Israel has committed to applying tariff quotas with a 0% tariff rate to many agricultural and food products such as eggs, meat, potatoes, carrots, mushrooms, honey, tuna, and several other products. This is considered a crucial "window of opportunity" for Vietnamese businesses to increase exports, especially for products in which they have a strong production and processing advantage.
Experts recommend that businesses proactively prepare a stable supply of goods, meeting all criteria regarding quantity, quality, and packaging specifications, in accordance with Israel's import quotas and needs.
Understanding consumer culture is key to staying ahead of the market.
According to the head of the Multilateral Trade Policy Department ( Ministry of Industry and Trade ), leveraging VIFTA cannot be limited to tax incentives alone, but should begin with a comprehensive study of the socio-economic conditions and consumption habits of the Israeli people.
In reality, consumption in Israel is seasonal and closely tied to traditional holidays. Israelis celebrate the New Year around September and consume a lot of honey during this time; December is the peak season for donut consumption; March features a festival similar to the Mid-Autumn Festival in Vietnam; and April and May are when people tend to replace household items, buy furniture, and purchase items for tourism .
Understanding the consumer cycle correctly will help Vietnamese businesses proactively plan production, exports, and access markets more effectively.
Israel: A small market but a large import turnover.
From the perspective of the local market, Mr. Le Thai Hoa – Commercial Counselor, Vietnam Trade Office in Israel, said that despite its relatively small population, Israel has a high demand for imports and a fast consumption turnover. The value of goods imported into this market is constantly increasing, especially in the consumer goods and food sectors.
Notably, Israeli businesses tend to prioritize importing processed goods with high added value, fully packaged, and ready for direct distribution to retail chains and supermarkets. This creates a clear advantage for Vietnamese exports, especially food products, seafood, coffee, cashews, spices, beverages, textiles, footwear, electronics, and household goods.
"This is an opportunity for Vietnamese businesses to shift strongly from exporting raw materials to exporting processed products, increasing added value when entering the Israeli market," Mr. Le Thai Hoa commented.
According to the Vietnam Trade Office in Israel, mobile phones currently lead in export value, followed by seafood – an item considered to have significant growth potential. Notably, Israel does not apply trade safeguard measures or anti-dumping duties on Vietnamese seafood, in the context of high domestic demand but insufficient self-sufficiency.
In addition, items such as processed cashews, instant coffee, high-quality rice (fragrant rice, long-grain rice, Jasmine, Japonica), coconuts and coconut products, spices, processed dried goods, building materials, electrical and office equipment, household goods, etc., are all considered to have promising prospects for expanding their market share in Israel in the near future.
We need to strengthen communication and support for businesses.
For VIFTA to truly come into effect, experts suggest that Vietnam and Israel need to strengthen coordination in disseminating the Agreement's content to the business community. At the same time, continuous updates on market information, import policies, technical standards, rules of origin, and specific requirements such as Halal standards are necessary.
Ms. Nguyen Thi Lan Phuong, Deputy Head of the WTO and Trade Negotiation Department (Ministry of Industry and Trade), said that the Ministry has proactively developed a plan to implement VIFTA, assigning specific tasks to units to provide free Israeli market information to businesses through the electronic portal.
The Ministry of Industry and Trade also encourages businesses to proactively report difficulties and obstacles regarding procedures, technical standards, rules of origin, etc., through industry associations or directly to management agencies for timely resolution within the framework of bilateral cooperation mechanisms.
Besides opportunities, export businesses also need to closely monitor the regional situation, especially transportation risks on shipping routes through the Red Sea. Choosing appropriate shipping routes and purchasing risk insurance for goods are crucial factors in ensuring trade safety.
According to experts, the Israeli market is still considered open, transparent, and modern, with a payment and governance system comparable to developed markets such as the EU or Switzerland. With thorough preparation and proactive engagement, Vietnamese businesses can fully capitalize on the opportunities offered by VIFTA.
Source: https://baophapluat.vn/hieu-thi-truong-israel-chia-khoa-de-doanh-nghiep-viet-tan-dung-hieu-qua-vifta.html
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