After eight years of persistent and effective negotiations, the Vietnam - Israel Free Trade Agreement was officially signed on July 25, 2023, in Israel. This is not only a significant milestone in bilateral relations but also a strategic step that will help the two countries maximize the potential for economic, trade, industrial, and technological cooperation in the new era.
According to a representative from the Multilateral Trade Policy Department of the Ministry of Industry and Trade, Israel is currently one of Vietnam's leading partners in trade, investment, and labor cooperation in the West Asian region. As Vietnam's third-largest export market and fifth-largest trading partner in the region, Israel plays an increasingly prominent role in Vietnam's strategy of expanding markets and diversifying its foreign economic relations.
A unique aspect of the trade relationship between the two countries is the complementary nature of their goods. Vietnam's and Israel's import and export goods do not directly compete but rather complement each other.
Vietnam has strengths in agricultural products, processed foods, and consumer goods, while Israel excels in high-tech products, electronics, fertilizers, and engineering machinery. This complementarity facilitates the promotion of key exports by both sides, while also expanding access to advanced Israeli technology, contributing to reduced production costs and enhanced competitiveness of Vietnamese goods.
Launched on December 2, 2015, Vietnam - Israel Free Trade Agreement negotiations lasted eight years with a total of 12 official negotiating sessions. Based on Resolution No. 110/NQ-CP dated July 21, 2023, of the Government, Minister of Industry and Trade Nguyen Hong Dien represented Vietnam in signing the Vietnam - Israel Free Trade Agreement.
This agreement not only facilitates deeper penetration of Vietnamese goods into the Israeli market but also opens opportunities for businesses in both countries to strengthen connections, exchange technology, invest, and develop high-skilled human resources.
With a tariff liberalization rate of up to 92.7% of tariff lines from Israel, Vietnam-Israel Free Trade Agreement promises to be a crucial lever for strong growth in Vietnam's export turnover in the coming years.
Positive trade frowth, but unbalanced
Citing data from Vietnam Customs, the Multilateral Trade Policy Department stated that import and export turnover between the two countries has grown strongly over the past decade. From $1.7 billion in 2015, total bilateral trade reached $2.9 billion in the first 11 months of 2024. However, the trade balance in 2024 still heavily favors Israel, with imports from Israel reaching $2.1 billion, while Vietnam's exports only reached $741.3 million.
Key export items from Vietnam to Israel include: telephones and components, seafood, footwear, cashew nuts, coffee, textiles, wood and wood products. Of these, coffee recorded an impressive growth of 15.2%, while many other items showed a downward trend. Notably, the range of export items to Israel is increasingly diverse, with nearly 70 categories, especially agricultural, forestry, and aquatic products, and processed foods.
Conversely, Vietnam mainly imports computers, electronic products and components (accounting for up to US$1.9 billion), machinery and equipment, fertilizers, and fruits and vegetables from Israel. These are high-tech items that contribute to supporting domestic production.
Industrial Cooperation - A New Area with Much Potential
According to the Multilateral Trade Policy Department, Israel is a country with a high level of scientific and technical expertise, especially in the fields of high-tech agriculture, biotechnology, electronics, telecommunications, and climate change adaptation. These are also areas that Vietnam is interested in and has a need to learn from, transfer technology, conduct research, and invest in development.
However, in recent times, the two countries have not implemented many concrete cooperation activities in the industrial sector. To realize the opportunities offered by Vietnam - Israel Free Trade Agreement, the Ministry of Industry and Trade proposes a series of solutions:
Firstly, strengthening exchanges of delegations at all levels and promoting cooperation between ministries, agencies, and chambers of commerce of the two countries.
Secondly, boosting trade and investment promotion, organizing business delegations to attend trade fairs and exhibitions in each country.
Thirdly, establishing a mechanism for sharing information on policies and technical standards to facilitate import and export of goods.
Fourthly, promoting cooperation in high-tech fields, biotechnology, agricultural product processing, food processing, and expanding into other potential areas.
Fifth, encourage Israel to invest in high-tech projects, consumer goods, food, and environmental treatment in Vietnam.
Sixth, strengthen cooperation in research, exchange of experts, and development of high-skilled human resources to serve industrial production.
Furthermore, the Ministry of Industry and Trade also requested Israel's support for projects funded by the agreement, creating conditions for Vietnamese businesses to learn advanced agricultural production models.
In addition to economic benefits, Vietnam - Israel Free Trade Agreement also opens up new investment opportunities from Israeli businesses in Vietnam. This will contribute to creating more jobs for workers in areas where Israel has strengths such as technology, smart agriculture, food processing, and environmental treatment.
In addition, strengthening cooperation with a country with a developed science and technology base like Israel will help Vietnam enhance its innovation capacity, promote digital transformation, and achieve sustainable development.
With a foundation of friendly relations, complementary economic structures, and strong commitments from both sides, Vietnam - Israel Free Trade Agreement is expected to be a significant boost to elevate Vietnam-Israel relations to a new level. When effectively implemented, Vietnam - Israel Free Trade Agreement will not only help increase bilateral trade but also expand cooperation in the fields of industry, science and technology, and innovation.

Source: Vitic/ congthuong.vn