The understanding came at the tenth round of Pak-Iran Political Consultations in Islamabad.
Pakistani side was led Foreign Secretary Tehmina Janjua while the Iranian side by its Deputy Foreign Minister Syed Abbas Araghchi.
Measures to enhance bilateral trade to achieve the annual target of US 5 billion dollars through facilitation of business communities, scaling down of trade barriers and speedy progress on facilitating preferential trade were discussed in detail.
Both sides agreed to hold the 21st session of the Joint Economic Commission early next year.
They also discussed ways and means to facilitate the growing number of Zaireen (pilgrims) traveling every year to Iran from Pakistan.
It was noted that fully supporting an Afghan-owned and Afghan-led peace and reconciliation process was the best way to overcome the serious security and politico-economic challenges faced by Pakistan and Iran.
They agreed that a coordinated approach in this regard was important to safeguard the core interests of both Pakistan and Iran.
Views were also exchanged on other important regional and international issues including the situation following the US unilateral withdrawal from the nuclear deal, the situation of human rights in Kashmir and the conflict in the Middle East.