The United States has welcomed the announcement by Afghan President Hamid Karzai and his Pakistani counterpart, Asif Ali Zardari, to fully implement the June 12 Transit Trade Agreement between the two countries.

In a statement Monday, the State Department said the announcement is a concrete demonstration of the common vision of development, prosperity and peace shared by the two presidents. It said the agreement will make a significant contribution to regional stability.

The statement says full implementation of the agreement will reduce the costs and delays of transport between the two countries and serve as a model for the region.

It says the agreement will also help reduce cross-border smuggling and increase government revenues from legitimate trade.

Both countries have already expressed interest in extending the agreement's reach through negotiations with other interested nations in the region.

The Afghan-Pakistani Transit Trade Agreement was concluded after years of negotiations and replaces an outdated one from 1965. The State Department says its full implementation demonstrates continuing commitment by both nations to work together to overcome technical and political obstacles.