Great opportunity for Vietnamese goods
As one of the key export products of Vietnam, seafood exports have faced many difficulties in recent times and fell by more than 27% compared to the same period in 2022. Therefore, the signing of the VIFTA is of great significance to seafood enterprises.
General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP) Truong Dinh Hoe said although the Israeli market accounts for a small proportion of Vietnam’s seafood exports, it is a very high-potential market because of its high purchasing power and solvency. Besides, Israel has limited natural resources and domestic labour resources. Although it is a small country, its consumption demand is quite large. Therefore, this market still has a lot of room for Vietnamese seafood enterprises to operate effectively.
Israel has been named in the top 22 leading markets among more than 100 seafood export markets of Vietnam. Export items to this market include shrimp, frozen squid, canned tuna, tra fish, and others.
Vietnamese tuna exports to Israel reached 36.63 million USD in 2022 and Israel ranks 4th among the 10 largest tuna import markets for Vietnam (after the US, Canada and Japan). Vietnam’s frozen squid exports to this market hit 23.22 million USD in 2022, accounting for 1.7% of Vietnam’s total squid export revenue.
Israel ranks 8th among the top 10 import markets for Vietnam’s squid and octopus while it ranks 20th in terms of frozen shrimp imports from Vietnam with a value of about 21 million USD.
“Vietnamese seafood products exported to Israel now have a stable foothold and are favoured and appreciated by domestic consumers. Therefore, the tax reduction schedule in the VIFTA will create great advantages for seafood exporters. Notably, the trade deal is also expected to open up opportunities for cooperation with the potential Middle East region through the gateway of the United Arab Emirates (UAE),” said Truong Dinh Hoe.
Minister of Industry and Trade Nguyen Hong Dien and Israeli Minister of Economy and Industry Nir Barkat signed the VIFTA in Israel on July 25, 2023, according to the Ministry of Industry and Trade.
The agreement was negotiated in the context of the bilateral relationship between Vietnam and Israel developing well, especially in the field of economy and trade. The signing of the VIFTA is the result of the tireless efforts of both countries after seven years with 12 negotiation sessions and is even more meaningful in the context of the two countries conducting many practical activities to celebrate the 30th anniversary of diplomatic relations.
Israel is the first country in West Asia that Vietnam has signed an FTA with, and similarly, Vietnam is also the first Southeast Asian country that Israel has signed an FTA with.
This agreement is highly appreciated by experts. Assoc. Prof. Dr. Dinh Trong Thinh said that the VIFTA is extremely important because Israel is a country withvery developed technology. The country also needs a lot of products as materials for its production and business activities.
Meanwhile, Vietnam is a key producer of agricultural products. The implementation of the VIFTA will create a favourable premise for Vietnam to promote the export of key products to Israel while Vietnam also has the opportunity to access Israel’s high-tech products, contributing to improving the competitiveness of Vietnamese goods.
Vietnam and Israel have complementary economies. The VIFTA is a strategic move by both countries, promising to boost bilateral trade and tighten economic ties, providing businesses in both countries with better access to each other’s market for mutual benefits.
“Because of Israel’s harsh natural conditions, imports are the main activity of Israel’s trade, particularly regarding consumer goods. Israel imports about 35 billion USD of consumer goods each year and this industry is one of Vietnam’s strengths. At the same time, Vietnam also needs to create conditions to be able to take advantage of their knowledge strength and high-tech techniques, both areas that Vietnam needs. This can be considered an opportunity for Vietnam to both export and import,” said Assoc. Prof. Dr. Ngo Tri Long.
Vietnam’s import and export activities with Israel are increasing. Import-export turnover was reported at nearly 2 billion USD in 2020, 2.3 billion USD in 2021, and 2.6 billion USD in 2022 and the figure is expected to go up this year. The VIFTA is expected to further expand export opportunities for Vietnamese goods to Israel.
Finding solutions to make good use of VIFTA
General Secretary of the Vietnam Fruit and Vegetable Association Dang Phuc Nguyen also expressed his great expectations for the VIFTA and said that Israel is a high-standard market. Therefore, Vietnamese businesses need to fully understand the regulations and business practices of this country and their partners for long-term cooperation.
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Vietnamese businesses need to fully understand the regulations and business practices of the Israeli market and their partners |
Although Israel’s market standards are not as strict as those of the US and EU, Vietnamese businesses also need to meet the standards of buyers. For example, fresh fruit must at least meet Global Gap standards. With processed food, it is necessary to pay attention to some specific standards such as Kosher Certification - the Jewish dietary standard. Kosher certification is not a legal requirement to import food into Israel, however, non-Kosher products have a smaller market share in Israel. Most supermarkets and hotels refuse to use products without this certification.
Israel is also a market far from Vietnam, so enterprises must have appropriate preservation technology to ensure the quality of their exports.
Assoc., Dr. Ngo Tri Long said that competitiveness is a big challenge for Vietnamese enterprises, so they need to pay attention to a number of issues. Businesses must be proactive in grasping information on policies, markets, and trade barriers in order to improve their product quality.
Vietnamese businesses must operate more professionally to approach the Israeli market because this is a market with great competitiveness and good conditions. Above all, Israel’s science and technology is very developed, so special attention should be paid to improvemetns to product quality, especially the issue of food hygiene and safety.
“Advice for Vietnamese businesses to effectively take advantage of VIFTA opportunities is promoting their proactiveness to approach the market and the professionalism in their import and export activities”, said Assoc., Dr. Ngo Tri Long.
