Vietnam and Israel have signed a free trade agreement to promote bilateral trade to US$3 billion, remove duties on most products, and facilitate cooperation in other fields including services, investment, technology, and digital transformation. 

The Vietnam-Israel Free Trade Agreement was inked by Vietnamese Minister of Industry and Trade Nguyen Hong Dien and Israeli Minister of Economy and Industry Nir Barkat in Tel Aviv on Wednesday, in the presence of Israeli Prime Minister Benjamin Netanyahu and Vietnamese Deputy Prime Minister Tran Luu Quang, who wrapped up his three-day visit to Israel on the same day.

The accord, reached after seven years of negotiation with 12 working sessions, provides a basis on trade in goods, services, and investment; rules of origin; technical barriers to trade; sanitary and phytosanitary measures; customs; trade remedies; government procurement; and legal-institutional issues, according to the Vietnamese ministry. 

With the free trade deal, the two countries expect to raise their two-way trade to $3 billion or more soon, quite higher than the $2.2 billion last year, which saw an 18 percent year-on-year trade growth rate.

Under the agreement, import taxes will be reduced in steps, with Israel ultimately removing duties on 85.8 percent of Vietnamese products while Vietnam will do the same for 92.7 percent of Israeli goods.

Currently, Israel is the third-largest buyer of Vietnamese products as well as the fifth-largest trade partner of Vietnam in West Asia.

The deal will create a favorable premise for Vietnam to promote its exports not only to Israel but to other markets in the Middle East, North Africa, and Southern Europe.

In return, Israeli enterprises will gain more access to ASEAN and the Indo-Pacific region, as well as other major economies that have an FTA with Vietnam, a market of 100 million people.

This agreement will not only help promote trade in goods but also boost cooperation in services, investment, technology, and digital transformation, among other fields.

By signing the accord, Vietnam has become the first country in Southeast Asia to have an FTA with Israel while the latter is the first nation in West Asia to sign such a pact with Vietnam.

The deal, which was signed while the two countries are celebrating 30 years of their diplomatic ties, is the 16th FTA Vietnam has inked with its trade partners around the world.

Currently, Vietnam is one of the top 20 economies in terms of international trade, with import and export turnover amounting to over $668 billion in 2021 and nearly $735 billion in 2022, the Vietnam Government Portal reported.

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