HCMC – After seven years of negotiations, Vietnam has become the first Southeast Asian nation to sign a free trade agreement (FTA) with Israel, which will result in tariff cuts by up to 92% for Vietnamese goods exported to Israel.
The agreement was signed in Israel by Vietnam’s Minister of Industry and Trade Nguyen Hong Dien and Israeli Minister of Economy and Industry Nir Barkat today, July 25, with Vietnamese Deputy Prime Minister Tran Luu Quang and Israeli Prime Minister Benjamin Netanyahu witnessing, reported the Vietnam News Agency.
Israel is the first country in West Asia with which Vietnam has signed an FTA, and Vietnam is also the first country in Southeast Asia that Israel has signed an FTA with.
The agreement consists of 15 chapters and several appendices about trade in goods, services and investment, rules of origin, technical barriers to trade (TBT), sanitary and phytosanitary measures (SPS), customs, trade remedies, government procurement, and legal and institutional framework.
According to the timeline, Vietnam and Israel will reduce tariffs by 85.8% and 92.7%, respectively. Both sides expect bilateral trade to reach US$3 billion in the near future.
The FTA will enable Vietnamese businesses to export their key products to Israel and other markets in the Middle East, North Africa, and Southern Europe, as well as create favorable conditions for Vietnam to access high-tech goods and services from Israel.
Conversely, Israeli companies will have the opportunity to access markets in ASEAN, Asia-Pacific, and the major economies with which Vietnam has signed FTAs.
Moreover, the FTA is expected to serve as a catalyst in enhancing cooperative ties between the two nations in areas such as investment, services, digital transformation, and technology.
Israel is one of Vietnam’s key partners in trade, investment, and labor in the region. This country currently stands as Vietnam’s third largest export market and fifth largest trading partner in West Asia.
Until now, Vietnam has signed 16 bilateral and multilateral FTAs.