Journey of 4 months, 3 meetings and a swift signing of VIFTA

WVR - Just 3 months after ending negotiations, Vietnam and Israel have officially signed VIFTA, which Minister Barkat described as a “very swift process”.
4 tháng, 3 lần gặp gỡ và một FTA ký kết ‘quá nhanh’…
Israeli Minister of Economy and Industry Nir Barkat meets with the press. (Photo: Tuan Viet)

“A few years ago, after returning from a trip to Vietnam, my daughter eagerly told me that I should definitely visit this country, the scenery and people here are wonderful. And as soon as I arrived in Vietnam, I realized that is so true”. That’s the sharing of Israeli Minister of Economy and Industry Nir Barkat during a press conference on the occasion of the Vietnam and Israel Business Forum taking place on the morning of August 16, in Hanoi.

He said that, both Viet Nam and Israel’s history show that both countries are aiming for peace and they share a desire for develop global cooperation with many regions, countries and territories.

Vietnam - a land full of potentials

According to the Minister, he and Minister of Industry and Trade Nguyen Hong Dien had 3 meetings in the last 4 months. It shows that, after 30 years of establishing diplomatic relations (1993-2023), the Governments of both countries have realized the opportunities to understand each other, and to promote cooperation. And VIFTA (Vietnam – Israel Free Trade Agreement) is a solid proof of the trust.

Just 3 months after ending negotiations, Vietnam and Israel have officially signed VIFTA, which Mr Barkat described as a “very swift process”.

“I think the negotiation and signing of this FTA is the fastest I’ve ever witnessed. It is especially important that this agreement was signed on the occasion of the 30th anniversary of the establishment of diplomatic relations.

Minister Nguyen Hong Dien affirmed with me that there will soon be a direct flight between the two countries. In addition, the e-visa policy is also an opportunity for the two countries to strengthen cooperation. Vietnamese goods will go to Israel faster and vice versa, Israeli technology is also coming to Vietnam faster. Thanks to VIFTA, all of this could be possible.”

To this Middle Eastern country, Vietnam is a land full of potentials. Not only with its impressively fast growth rate, the country is also an important gateway to access ASEAN markets. In particular, Vietnam has signed, implemented total of 16 FTAs with a number of economies.

Minister Nir Barkat informed that Israel currently focuses on seven sectors, specifically: high technology, homeland security, high-technology to increase productivity, healthcare and other areas of life, and high-technology in agriculture, food, tourism.

As the world-leading nation in innovation, he believed that in the coming time, Israel can provide technology to help Vietnam in areas such as marketing and sales. This will facilitate business as it will be easier to customize the need of parties and the market.

“The Israeli’s Government’s strategy is that, we focus on Vietnam's position, thereby bringing economic benefits. In addition, the Israeli Ministry of Economy and Industry wants to cooperate with the Ministry of Industry and Trade on the establishment of a inter-government fund to support businesses. Israel already has similar cooperation funds with Canada and the United States”, he said.

More from WVR
Vietnam-Israel Free Trade Agreement (VIFTA): Vietnam-Israel highway is open now Vietnam-Israel Free Trade Agreement (VIFTA): Vietnam-Israel highway is open now

The challenge of business

Sharing on the challenges when VIFTA comes into effect, Minister Nir Barkat said that he used to be an entrepreneur, so he understands the difficulties in the implementation of FTAs. However, both Governments are willing to listen to the business community, to keep the optimistic spirit of this agreement.

“Right from the first meeting, Minister Nguyen Hong Dien and I shared the view that our countries shares a great opportunity for development. So why don’t we accelerate those opportunities. If there's a challenge, it's on the businesses’ side”, he emphasized.

“Normally, businesses always go “faster” that the government, but with VIFTA, it’s the opposite. That’s why at the Vietnam-Israel Business and Economic Forum, I gave them a challenge. They need to find ways to be faster than both governments, take advantage of the rapidly growing relationship between the two sides and realize the opportunities and benefits ahead”, he added.

As a former entrepreneur, he said that, it’s important to know where you are and what you need to do. Young Israeli entrepreneurs and start-ups need to first understand the country and people of Viet Nam, then they will find the right directions for promotion and investment.

Waiting for the prosperity of two-way trade

Sharing with The World and Vietnam Report, Mr. Tran Quang Huy, Director-General of Asia-Africa Market Department (MOIT) said that VIFTA is a comprehensive agreement covering many areas of mutual interest between Vietnam and Israel, such as trade in goods, services-investment, rules of origin, sanitary and phytosanitary measures, customs, government procurement, etc.

4 tháng, 3 lần gặp gỡ và một VIFTA ký kết ‘quá nhanh’…
Mr. Tran Quang Huy, Director-General of Asia-Africa Market Department (MOIT). (Photo: G.T)

"With the strong commitment of the two sides to raise the liberalization rate, two-way trade will have strong growth in the coming time. VIFTA is expected to be a lever to help strengthen the cooperation relationship between the two countries in terms of investment, trade, services, digital transformation, technology", he said.

Mr Tran Quang Huy also made four proposals to realized the bilateral cooperation:

First, the two countries need to strengthen trade and investment promotion activities, step up the organization of business delegations to attend trade and investment promotion events in each country.

Second, Vietnam should call for more Israeli investment in industrial production projects, especially high-tech, biotechnology, information technology, new material technology, food and consumer industry, technology transfer and high-tech development in Vietnam…

Third, we should ask Israel to research on the possibility of transfering technology to Vietnamese businesses through numerous measures, such as forming joint ventures, creating conditions for Vietnamese enterprises to produce more high-tech products, bringing high added value in the field of food production and processing such as semiconductor components, dairy products, etc.

Fourth, Vietnam stands ready to cooperate with Israel in the field of human resource training in order to raise the technological level in electronic industry production, high-tech agriculture, materials industry, information technology, green and clean production.

The Director-General of Asia-Africa Market Department hopes that, with the close cooperation of the Vietnam-Israel business community, it is certain that the economic and trade cooperation between the two countries, it is certain that the economic and trade cooperation between the two countries, as well as between businesses of the two countries will reach new heights in the coming time.

After 7 years and 12 sessions of negotiations, on July 25th, both Vietnam and Israel signed the VIFTA, opening up many opportunities for business cooperation and investment for businesses of the two countries.

In 2022, the total import-export turnover of Vietnam with Israel reached 2.2 billion USD, up 17.9% over the same period in 2021.

In which, Vietnam's export turnover to Israel reached 785.7 million USD, up 0.6% Vietnam's import turnover from Israel reached 1.4 billion USD, up 30%; Vietnam's trade deficit from Israel was worth $656.5 million, up 99.5% over the same period in 2021.

According to MOIT, Israel is currently the 3rd largest export market and the 5th largest trading partner of Vietnam in West Asia. It is also considered as a large and potential market for Vietnamese goods in the region.

The product structure of Israel and Vietnam are complementary, not directly competitive. This creates favorable conditions for Vietnam to boost export of many strong products to Israel, at the same time have the opportunity to access Israel’s high-tech product, therefore contributing to reducing production and business costs, and improving the competitiveness of Vietnamese goods.

Vietnam - Israel Business Forum hopes for 3 billion USD in trade revenue after VIFTA
Vietnam emerging a big player on Israel’s investment map: Israeli Minister Nir Barkat
Vietnam - Israel Inter-Governmental Committee convened 3rd meeting in Hanoi
Prime Minister Pham Minh Chinh receives Israeli Minister Nir Barkat
Vietnamese firms enjoy great opportunities from FTAs: MOIT
(Translated by Quang Dao)