The signing of the Vietnam - Israel Free Trade Agreement will open up numerous opportunities for Vietnamese businesses seeking to access this potential market, according to the Vietnam Trade Office in Israel.
Exporting a group of local goods and processed products from the nation with high-added value of to the Israeli market has many advantages.
Economic and trade co-operation between both sides has grown steadily over recent years.
The two countries signed an agreement on economic and trade co-operation in 2004, established an Intergovernmental Committee with meetings held alternately in each country, thereby contributing to creating a mechanism to propel trade exchanges.
The two sides are in the process of negotiating a bilateral free trade agreement and have undergone a total of 12 rounds of negotiations.
Two-way trade has consistently seen rapid growth in recent years, from US$1.58 billion in 2020 to US$1.89 billion in 2021, reaching US$2.23 billion in 2022, up 17.85% from the previous year.
In terms of the trade balance, the nation is suffering a trade deficit from Israel due to the nation importing computers, components, and electronic boards with great value.
This represents a group of goods imported by foreign-invested companies in the country in their multinational system chain to process and serve the production and assembly of finished products locally, before being exported back to countries around the world.
Israel is currently the nation’s fifth largest trading partner and the third largest export market in the Middle East behind only the UAE and Turkey.
The structure of import and export goods between the two countries is complementary, with the goods that Israel needs to import also being strong Vietnamese exports and vice versa.
Over recent years, Vietnamese exports to the Israeli market have reached around US$780 million per year. Specifically, in 2021 exports increased by 14.2% over the previous year and exports to Israel hit US$785.7 million in 2022.
Currently, Vietnamese exports have restored growth momentum to the Israeli market.
In the first two months of the year, exports to this market reached US$125.5 million, up 13% on-year.
It is expected that providing that the market situation is favourable, Vietnamese exports there for the whole year may reach roughly US$850 million.
In terms of commodity structure, each year sees about 70 Vietnamese items of all kinds shipped to Israel.
In 2022, the country’s major export items, including mobile phones and components reached US$293.2 million; seafood products hit US$80.4 million, including shrimp, frozen squid, canned tuna, and pangasius (tra fish); agricultural products of all kinds, such as cashew nuts, reached US$59.8 million; coffee fetched US$24.3 million; footwear raked in US$92.3 million; and garments and textiles hit US$32.8 million.
In 2022, mobile phones and components were the largest export items, accounting for 37.3%.
The remaining items belong to the group of food products, consumer goods, household goods, clothing, footwear, and electronic goods, accounting for 62.7% of total Vietnamese export turnover to Israel.
Coffee, garments, and textiles, as well as footwear, are export items with strong growth rates of 20% to 50%.
For seafood products, every year sees Israel among the top 22 leading markets out of over 100 of the nation’s seafood export markets.
Most notably, in 2022 tuna exports to Israel raked in US$36.63 million and Israel ranked fourth among the country’s 10 largest tuna import markets, behind the United States, Canada, and Japan.
Frozen squid exports to this market reached US$23.22 million, making up 1.7% of the country’s exports of this item, with Israel ranked eighth among the top 10 import markets for Vietnamese squid and octopus.
Frozen shrimp exports to the Israeli market reached about US$21 million, with Israel ranked 20th.
Canned tuna, frozen shrimp and squid, pangasius, coffee, pepper, cashew nuts, clothes, and shoes have secured a stable foothold within the market and are proving popular with Israeli consumers.
Currently, Israeli businesses are increasingly interested in the Vietnamese market and partners, viewing the country as one of the important stable sources of goods in Asia. This especially true for agricultural and seafood products, processed foods, beverages, household goods, electronic products, equipment, and consumer goods which are capable of meeting domestic demand.
VOV
