Taking advantage of trade deal with Israel

Secretary General of the Vietnam Association of Small and Medium Enterprises (VINASME) To Hoai Nam

The VIFTA has been signed after seven years of negotiations. Could you elaborate on this significant event in Vietnam’s international economic integration process?

The signing of the VIFTA was the result of 12 negotiation sessions in seven years. This significant event marked a new milestone in trade relations between Vietnam and Israel, since this is Vietnam’s first bilateral FTA with a West Asian (Middle East) country and Israel’s first FTA with a Southeast Asian (ASEAN) nation.

The result also shows the MoIT’s role as one of the pioneers in implementing the tasks assigned by the Government in Resolution 105/NQ-CP on measures to resolve production and trade difficulties, accelerate administrative reform, and tighten rules and disciplines. Via this Resolution, the Government assigned the MoIT to speeding up the completion of necessary procedures for the signing of the FTA with Israel, ending up negotiations on the Comprehensive Economic Partnership Agreement (CEPA) between Vietnam and the United Arab Emirates (UAE) in August 2023, and accelerating negotiations on the FTA between Vietnam and the European Free Trade Association (EFTA). The MoIT is also responsible for carrying out flexible trade promotion activities to strengthen Vietnamese goods’ position in traditional export markets while promoting exports to new and potential ones.

What do Vietnamese small- and medium-sized enterprises expect from the VIFTA?

Under the commitments in the VIFTA, Israel will gradually eliminate 92.7 percent of tariff lines for Vietnamese exports, while Vietnam will remove 85.8 percent of tariff lines for Israeli exports. The two sides expect bilateral trade will increase remarkably and reach US$3 billion or higher levels in the near future.

The VIFTA will bring more opportunities for Vietnamese businesses to boost exports to not only Israel but also other markets in the Middle East, North Africa and Southern Europe.

Israel is a world-leading country in terms of high technology, with a large number of creative innovation firms. When the VIFTA takes effect, it will enable Vietnamese businesses’ access to high technologies of Israeli companies, helping them enhance manufacturing capacity, improve product quality and competitiveness.

Vietnamese and Israeli businesses discuss trade opportunities

Does VINASME have any proposals to help small- and medium-sized enterprises benefit from the VIFTA as soon as possible?

First of all, the MoIT should disseminate the VIFTA’s commitments among the business community. In addition, the ministry should draft policies and legal documents guiding the implementation of the agreement, and provide guidance for the Vietnamese trade office in Israel to update domestic companies on the Israeli market demand for products in each sector, helping them build suitable production and export promotion strategies.

Appropriate mechanisms should also be created to encourage domestic companies to cooperate with Israeli firms through technology transfer, which will help them improve manufacturing capacity and product quality to meet the demand of the Israeli market.