What is the Vietnam – Israel Free Trade Agreement (VIFTA)?
- Full Name: Vietnam – Israel Free Trade Agreement
- Abbreviation: VIFTA Member Countries: Vietnam and the State of Israel
- Date of Signing: July 25, 2023 (in Tel Aviv, Israel)
- Date of Entry into Force: November 17, 2024
Negotiation Background and Reasons for Establishment
The Vietnam – Israel Free Trade Agreement (VIFTA) is a landmark economic pact, signed on July 25, 2023, in Tel Aviv, Israel, after seven years and 12 official negotiation rounds. Set to enter into force on November 17, 2024, VIFTA marks a significant milestone as Vietnam’s first FTA with a Middle Eastern country and Israel’s first with a Southeast Asian nation, coinciding with the 30th anniversary of diplomatic relations between the two countries.
Reasons for Establishment:
Economic Complementarity: The economic structures of Vietnam and Israel are highly complementary. Vietnam is strong in agricultural and aquatic products, textiles, footwear, and electronics, while Israel excels in high technology, innovation, water management, high-tech agriculture, and healthcare.
Market Access Expansion: VIFTA facilitates Vietnamese goods (especially agricultural and aquatic products) to access the Israeli market with high preferential tariff commitments, while indirectly opening a gateway to the Middle East.
Technology Cooperation: The agreement is expected to boost cooperation in investment, services, digital transformation, and high technology, enabling Vietnam to access Israel’s capital, technology, and advanced management experience.
What are the main benefits and commitments of VIFTA?
VIFTA is a comprehensive agreement structured across 15 chapters and several annexes, designed to significantly boost trade, investment, and technological cooperation between Vietnam and Israel. Its key commitments focus on substantial tariff liberalization, particularly benefiting Vietnamese agricultural and aquatic exports, and fostering robust collaboration in advanced sectors.
Main Chapters of the VIFTA
| Commitment Area | Main Content |
|---|---|
| Trade in Goods | Provisions on tariff reduction and elimination (Israel commits to eliminate tariffs on 92.7% of tariff lines; Vietnam on 85.8%). |
| Rules of Origin | Criteria to determine the origin of goods to qualify for preferential tariffs (using VIFTA Certificate of Origin form). |
| Services and Investment | Commitments to market access and facilitation of bilateral services and investment. |
| Customs Procedures | Rules and procedures to facilitate trade. |
| TBT/SPS | Provisions on Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary Measures (SPS). |
| Trade Remedies | Rules on applying trade defense measures. |
| Government Procurement | Regulations on opening the government procurement market. |
| Legal and Institutional Provisions | Regulations on implementation; transparency; and dispute settlement. |
Key Highlights
High Tariff Commitments: Israel grants a very high level of liberalisation, eliminating tariffs on over 92.7% of tariff lines — a significant advantage for Vietnamese goods.
Benefits for Agriculture and Fisheries: Israel offers tariff-rate quotas (TRQs) at 0% for several agricultural products (e.g., eggs, potatoes, carrots) and immediate duty-free access for most Vietnamese seafood.
Technology Cooperation: The agreement lays the groundwork for robust collaboration in advanced sectors such as agriculture, water management, renewable energy, electronics, semiconductors, and artificial intelligence.
Where can I find official VIFTA documents and implementation guidelines?
For businesses and stakeholders seeking detailed information on VIFTA, official resources provide comprehensive access to the agreement’s full text, tariff commitments, and implementation guidelines. These resources are crucial for understanding the specific rules and benefits of the agreement.
Vietnam FTA Portal (Ministry of Industry and Trade – MOIT): The official and most comprehensive source.
- Full text of the VIFTA (in Vietnamese and English)
- Tariff commitments and product-specific rules of origin
- Link: https://vntr.moit.gov.vn/
Implementation Guidelines and Legal Documents
- Ministry of Industry and Trade (MOIT): Lead agency; Circular detailing the rules of origin and C/O issuance procedures under VIFTA.
- Ministry of Finance (General Department of Customs): Government Decree on Vietnam’s Special Preferential Import Tariff Schedule for implementing VIFTA.
- Trade Promotion Agencies: The Vietnam Chamber of Commerce and Industry (VCCI) and Vietnam’s Trade Offices in Israel regularly organise workshops and provide handbooks to help businesses effectively utilise the agreement.
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