Vietnam will, under a recent trade deal inked with Cambodia, apply the zero tax rate on 40 agricultural products, including coffee and rubber, from the neighbor country from Sept. 1, but rice and tobacco will be subject to quotas.

Vietnam and Cambodia have agreed on the import quotas on rice and tobacco in 2006 and 2007, sources from the Vietnamese Trade Ministry said Wednesday, noting that the two sides will further negotiate about the quotas for following years. Vietnam will place the zero tax rate on 30,000 tons of rice and 1,000 tons of tobacco in 2006, and on 100,000 tons of rice and 3,000 tons of tobacco in 2007.

The trade deal is in line with roadmaps for tariff reduction and exemption committed by the two countries in a number of bilateral and multilateral agreements, the sources said, adding that it will also help facilitate poverty reduction in Cambodia.

Vietnam exported 375 million U.S. dollars worth of goods to Cambodia in the first half of this year, a year-on-year surge 48.8 percent. Meanwhile, it spent 86 million dollars on Cambodian imports, up 19.4 percent.

The two-way trade is expected to increase to 900 million dollars in 2006 from 692 million dollars in 2005, the sources said.

Source: Xinhua