Prospects from VIFTA Agreement: Vietnamese enterprises face new opportunities

(Chinhphu.vn) - After more than a year of implementation, the Vietnam - Israel Free Trade Agreement (VIFTA) is showing positive signs, becoming a new driving force to promote trade, investment and technological cooperation between the two countries.

Ms. Nguyen Thi Lan Phuong, Multilateral Trade Policy Department ( Ministry of Industry and Trade ): VIFTA has a remarkable level of commitment, especially in the field of trade in goods - Photo: BTC

At the seminar "Prospects from the VIFTA Agreement: Solutions for effective utilization" organized by Industry and Trade Magazine on December 4, Ms. Nguyen Thi Lan Phuong, Department of Multilateral Trade Policy (Ministry of Industry and Trade) said that VIFTA has a remarkable level of commitment, especially in the field of trade in goods. As soon as the Agreement came into effect, Israel eliminated 66.3% of tariff lines for Vietnamese goods; by the end of the roadmap, this rate reached 92.7%. In the opposite direction, Vietnam eliminated about 85.7% of tariff lines. These commitments create conditions for Vietnamese products with strengths such as footwear, textiles, electronics, machinery, and agricultural products to access the Israeli market more easily.

In the first year of implementation, the Ministry of Industry and Trade has completed the legal framework, issued an action plan, implemented propaganda and information dissemination, and coordinated with ministries and branches to review documents to ensure that businesses on both sides enjoy incentives in accordance with regulations.

The potential is still huge.

From the Israeli side, Commercial Counselor Le Thai Hoa affirmed that VIFTA is an important milestone in economic cooperation between the two countries. Israel is currently Vietnam's third largest trading partner in the Middle East - Africa region and Vietnam is also one of Israel's largest partners in Southeast Asia.

Due to the disruption in supply, Israeli businesses are actively seeking partners from Vietnam, opening up great growth potential for value-added products such as seafood, cashew nuts, coffee, rice, construction materials and processed products. The Counselor forecasts that two-way trade turnover could exceed 5 billion USD in a short time when the roadmap for deeper tax cuts is implemented.

He also noted that Israel has very high requirements for quality standards, many products need Kosher or Halal certification depending on the customer group. Vietnamese businesses need to proactively grasp the new import regulations of Israel, a country that is gradually moving towards applying EU and US standards.

Ms. Do Thi Thuy Huong, Vice President of Vietnam Association of Supporting Industries: VIFTA opens up huge opportunities in terms of export, technology access and supply chain connection - Photo: BTC

Assessing the impact of the Agreement on the electronics industry, Ms. Do Thi Thuy Huong, Vice President of the Vietnam Association of Supporting Industries, said that VIFTA opens up huge opportunities in terms of exports, technology access and supply chain connections. Israel is a world-leading country in high technology, especially in semiconductors, medical equipment, cyber security and IoT.

Thanks to tariff incentives, Vietnamese electronic products and components are more competitive in this market. However, electronics enterprises still face many challenges such as: Extremely strict technical and quality standards; Complex rules of origin; Insufficient depth of domestic supply chain; High logistics costs; Lack of in-depth market information.

The Association proposed supporting businesses to improve quality standards, master rules of origin, focus on strong segments, strengthen B2B connections, and hope that trade promotion and export finance programs will be promoted.

Businesses need to be more proactive

According to Ms. Nguyen Thi Lan Phuong, although the Government and ministries and branches have made efforts to support, taking advantage of incentives still depends on the level of initiative of enterprises. Therefore, she recommends that enterprises should proactively learn about commitments and market information, and take advantage of free information sources from the Ministry of Industry and Trade and the Trade Office.

Along with that, promptly reflect difficulties and problems to receive support in resolving them through bilateral mechanisms.

Participate in capacity building programs, especially related to rules of origin, Halal/Kosher standards, product quality.

Counselor Le Thai Hoa said that the Vietnam Trade Office in Israel will continue to disseminate the contents of the VIFTA Agreement to local businesses; connect Israeli importers with Vietnamese businesses; provide market information, technical standards, import policies; organize seminars, business delegations, specialized trade promotion events; support businesses in evaluating partners and implementing investment projects.

Anh Tho

Source: https://baochinhphu.vn/trien-vong-tu-hiep-dinh-vifta-doanh-nghiep-viet-truoc-co-hoi-moi-102251204145903418.htm