Cambodia and Vietnam inked an agreement yesterday to drop import tariffs on dozens of products in an effort to boost bilateral trade.

Cambodian Commerce Minister Pan Sorasak signed a memorandum of understanding (MoU) with Vietnamese Minister of Trade and Industry Tran Tuan Anh ahead of the opening session of the 8th Cambodia-Laos-Myanmar-Vietnam Summit (CLMV-8) in Hanoi.

According to the agreement, Cambodia will provide a special preferential duty on 29 Vietnamese products, allowing them to enter the country duty-free. Vietnam agreed to provide the same preferential treatment for 39 Cambodian products, including 300,000 tonnes of rice annually and 3,000 tonnes of dried tobacco in 2016 and 2017.

Soeng Sophary, spokesman of the Ministry of Commerce, said the MoU would benefit producers and exporters in both countries, and promote the flow of cross-border trade.

“This bilateral MoU will provide direct benefits to producers and exporters because they will receive a tariff exemption and consumers will in turn get fair prices,” she said.

“It is part of mutual strategy of promoting bilateral economic growth.”

Hanoi is hosting the CMLV-8 concurrently with the 7th Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy Summit (ACMECS-7), and the World Economic Forum on Mekong (WEF-Mekong).

The trade agreement follows the launch of the ASEAN Regional Business Council (RBC) at the WEF Mekong on Tuesday. Among the key priorities of the RBC, which comprises 25 ASEAN and 30 global companies, is lifting non-tariff barriers that continue to impede regional trade.

“Trade barriers have come down significantly, close to zero in most cases, but there are so many non-tariff barriers across ASEAN,” the Vietnamese daily Viet Nam News quoted RBC chairman Nazir Razak as saying.

“We will work on these barriers by engaging the government and different sectors.”

Trade between Cambodia and Vietnam surpassed $3 billion in 2015, falling far short of the targeted $5 billion.