Officially entering into force on November 17, 2024, the Vietnam-Israel Free Trade Agreement (VIFTA) marked a major milestone in bilateral economic cooperation. As the first free trade agreement Vietnam signed with a Middle Eastern nation, it positioned Vietnam as an ASEAN pioneer in establishing an FTA with this market.

With a dynamic economy, high per capita income, and diverse import demands, Israel serves as a strategic destination for Vietnam’s key export commodities. Upon the agreement's implementation, major export categories including agricultural products, seafood, textiles, and footwear gained immediate tariff eliminations or deep preferential cuts.

Israel currently stands as Vietnam’s third-largest trading partner in the Middle East. In 2025, bilateral trade turnover reached a record high of approximately $3.6 billion. During the first eight months of 2026, two-way trade reached $2.72 billion, up 9.3 percent year-on-year. Of this total, Vietnam’s exports accounted for $804.7 million while imports stood at $1.92 billion.

Speaking at a seminar on opportunities and challenges for Vietnamese businesses in Israel within the new context in Hanoi on November 5, Mr. Le Thai Hoa, Vietnamese Trade Counselor in Israel, noted that bilateral trade turnover has recorded impressive leaps. In terms of export structure, key items such as phones and components, seafood, cashew nuts, textiles, and coffee maintain stable market shares.

Geopolitical developments and regional conflicts have disrupted local supply in Israel, prompting domestic importers to seek high-quality alternative sources from Vietnam. Furthermore, the launch of direct flights between Tel Aviv and Hanoi by Arkia Airlines provides fresh momentum, enabling business representatives to survey markets and engage directly with partners.

Despite significant advantages under VIFTA, bringing Vietnamese products into Israel faces unique hurdles. Technical standard systems and sanitary inspection regulations enforced by the Israeli Ministry of Health and the Standards Institution of Israel are strictly applied.

A primary challenge for agricultural and food enterprises involves Kosher certification. Ms. Nancy Nguyen Bao Tram, representative of KOF-K Kosher in Vietnam, noted that penetration into Israeli distribution networks requires compliance with traditional Jewish dietary standards, demanding rigorous oversight from raw material traceability to the strict separation of meat, dairy, and neutral production lines.

Parallel to technical barriers, Ms. Pham Hoai Linh from the Foreign Market Development and Multilateral Trade Department under the Ministry of Industry and Trade highlighted that geopolitical tensions in the Middle East exert heavy pressure on logistics. Escalating Red Sea tensions have forced shipping lines to reroute around Africa’s Cape of Good Hope, driving up freight costs, raising insurance premiums, and extending transit times.

To capitalize on commercial value and overcome market barriers, Vietnamese enterprises should actively master rules of origin under the Vietnamese Ministry of Finance's Circular 44/2025/TT-BCT guiding VIFTA implementation. Agricultural and food processors should invest early in Kosher certification from accredited international organizations.

Additionally, exporters need robust risk management strategies to handle geopolitical disruptions by diversifying transport modes, selecting comprehensive cargo insurance, and using secure payment methods. In the long term, businesses must transition from short-term trade to sustainable partnerships while maintaining quality and delivery commitments. 

High-tech cooperation with Israeli partners in smart agriculture, drip irrigation, water management, and post-harvest preservation will help Vietnamese firms boost added value and expand presence across the broader Middle East.

Source: VnEconomy

https://en.vneconomy.vn/vifta-drives-vietnam-israel-economic-partnership-to-new-heights.htm