Vietnam, Israel to accelerate VIFTA implementation as trade surges

Vietnam and Israel have agreed to accelerate the effective implementation of the Việt Nam–Israel Free Trade Agreement (VIFTA) to further develop cooperation in trade, industry, and innovation.

The consensus was reached during a working session in Jerusalem on Monday between Vietnamese Ambassador to Israel Nguyễn Kỳ Sơn and Israeli Minister of Economy and Industry Nir Barkat.

Minister Barkat described Vietnam as one of the world's key manufacturing hubs, citing its population of over 100 million, a diligent and disciplined workforce, and an increasingly attractive investment climate. He noted these factors present significant opportunities for Israeli firms to expand partnerships, investment, and commercial activities in the country.

He stated that relations are flourishing across multiple domains, from economy and trade to people-to-people exchanges. With the VIFTA now in force, Barkat emphasized that the two nations should leverage their complementary economic strengths to elevate two-way trade. He proposed an early convening of the Inter-Governmental Committee to review cooperation, address obstacles, and establish new directions for collaboration.

Highlighting investment prospects, Barkat positioned Israel as a leading global innovation hub with strengths in artificial intelligence, cybersecurity, medical technology, and high-tech agriculture. He added that approximately 80 per cent of Israeli companies operate in cutting-edge sectors and are experienced in commercialising new products for global markets. Israel is prepared to host Vietnamese business delegations and is considering sending its own trade missions to Vietnam to identify new investment and cooperation opportunities, he said.

For his part, Ambassador Sơn reiterated that Vietnam consistently values its friendship and multifaceted cooperation with Israel, particularly in the economic, trade, science, technology, and innovation sectors.

Sơn noted that the VIFTA, which took effect in November 2024, has provided a significant impetus to bilateral trade, pushing total flows toward the $4 billion mark and solidifying Vietnam's position as one of Israel’s key trade partners in Asia and globally. He pointed to considerable untapped potential, especially in areas where Israel’s technological advantages align with Vietnam’s development needs. The ambassador called on both sides to make fuller use of VIFTA's preferential terms to increase investment, technology transfer, and business connectivity. He also suggested that Israel continue to widen market access for Vietnamese products and enhance scientific and technological cooperation by combining Israeli expertise with Vietnam's resources and market potential.

Both officials pledged to maintain regular contact between their respective agencies and business communities to effectively implement the agreed-upon initiatives, thereby strengthening economic, trade, and investment ties.

In the first five months of the year, bilateral trade approached $1.6 billion, with Vietnam's exports to Israel surging 30.6 per cent year-on-year to $462 million. If the current momentum continues, full-year trade is forecast to reach approximately $3.9 billion, with Vietnamese exports expected to exceed $1 billion for the first time. This follows a strong performance last year, when two-way trade reached $3.63 billion, an 11.8 per cent annual increase, of which Vietnam's exports accounted for $865 million, up 8.9 per cent.

On the investment front, Israel currently has 45 active projects in Vietnam with a total value of around $156 million, while Vietnamese investment in Israel stands at approximately $78 million.