Iran and Iraq on Sunday signed a memorandum of understanding, meant to open $1 billion credit line that could boost the flow of Iran's exports to its neighbour, the Iranian Commerce Ministry said.
"The credit will be used for the export of technical and engineering services, as well as other goods to Iraq," an Iranian Commerce Ministry spokesman said.
Iran's Export Guarantee Fund will pay Iranian exporters for their exports to Iraq and get the money back later from Trade Bank of Iraq, with one per cent interest.
An Iranian trade official has expected the worth of Iran's exports to Iraq will amount to US$1 billion this year from US$800 million in 2004.
Director General of the Exports Affairs Department at Ministry of Industries and Mines Ahmad Qassemi said detergents, vegetable oil, construction materials, household appliances, and carpets would be the most important items to be exported to Iraq.
According to IRNA, Qassemi said the two sides have signed agreements for cooperation in seven different fields, including establishment of auto manufacturing units as well as the detergent plants in Iraq as well as reconstruction of the country's textile industries.