Opportunities for Vietnamese Businesses to Export High-Value Goods to Israel

Officially effective from November 17, 2024, the VIFTA Agreement is expected to be a driving force opening a new phase in bilateral economic, trade, and investment cooperation, especially in boosting Vietnam’s exports to the potential Israeli market.

Numerous Tariff Preferences

At the seminar “Prospects from the VIFTA Agreement: Solutions for Effective Utilization” held on December 4th, Ms. Nguyen Thi Lan Phuong, Deputy Head of the WTO and Trade Negotiation Department, Multilateral Trade Policy Division (Ministry of Industry and Trade), provided information on the noteworthy points in the commitments of the Vietnam-Israel Free Trade Agreement (VIFTA).

Ms. Nguyen Thi Lan Phuong stated that the VIFTA Agreement contains extremely noteworthy commitments that businesses need to pay attention to.

Specifically, regarding trade commitments for goods, Israel has committed to eliminating tariffs on over 66.3% of tariff lines immediately upon the agreement’s entry into force, and an additional 26.4% after a 3-5-7 or 10-year phase-out period. Thus, the total liberalization of tariff lines at the end of the phase-out period will reach approximately 92.7% of the total tariff lines.

Conversely, Vietnam will grant Israel liberalization commitments, whereby upon the agreement’s entry into force, we will liberalize approximately over 30% of tariff lines, and after a 3-5-7 year phase-out period, we will further reduce approximately 51.6%. Therefore, the total liberalization at the end of the phase-out period for Vietnam’s tariff lines will reach approximately 85.7%.

Ms. Phuong emphasized that Israel offers Vietnam preferential tariffs on many goods in which Vietnam has a competitive advantage, such as footwear, textiles, electronics, machinery, and equipment. Conversely, Vietnam also reduced tariffs on goods that Israel has a competitive advantage in exporting to Vietnam, such as fertilizers, machinery, equipment, and spare parts.

“With that level of liberalization commitment and other commitments in goods trade such as rules of origin and food safety and hygiene, goods between the two countries will have a better opportunity to access each other’s markets,” Ms. Phuong said.

Trade exchange grows strongly

According to Mr. Le Thai Hoa, Commercial Counselor of the Vietnamese Trade Office in Israel, VIFTA is an important milestone in the multifaceted bilateral cooperation between the two countries, especially in the field of trade and investment.

The agreement has created a strong impetus for the positive development of cooperation between Vietnam and Israel in recent years, with strong growth in trade exchange, facilitating and providing specific incentives for the activities of businesses in both countries according to the commitments stipulated in the agreement.

Businesses have initially taken advantage of the Israeli market to export goods, attract FDI, and promote interaction and exchange between the two sides.

As a result, despite many difficulties in the past, bilateral trade turnover in 2024 still reached approximately US$3.25 billion, with Vietnamese exports reaching approximately US$800 million.

It is estimated that for the whole year of 2025, trade exchange between the two countries could reach over US$3.75 billion, with Vietnamese exports reaching approximately US$850-880 million, an estimated increase of over 10% compared to 2024.

In total, to date, Israeli foreign direct investment in Vietnam has reached approximately US$156 million with a total of 45 projects. Meanwhile, Vietnam has registered investments in Israel with a total registered capital of over US$78 million across 4 projects.

Mr. Hoa emphasized that, according to the plan, the direct flight between Israel and Vietnam, scheduled to open on January 5, 2026, will further facilitate travel for traders, businesses, investors, tourists, and citizens of both countries in market research, seeking and expanding business cooperation between partners.

These results are very encouraging and still hold much promise for development for Vietnamese businesses.

He also stressed that Israeli businesses prefer to purchase finished, processed goods with high added value, pre-packaged and ready for distribution through various channels so that consumers can use them immediately after purchase.

“These are favorable factors for Vietnamese manufacturing and exporting businesses to capitalize on the opportunity to export high-value-added products and goods to Israel,” Mr. Le Thai Hoa stated.

Source: Economic and Financial Magazine