The agreement is the latest sign that the relations between the two countries are increasingly improving and also pave the way for explore Libya's untapped oil wealth.

It also came after the first trade mission to Libya in February led by Assistant Secretary for Manufacturing and Services Nicole Lamb-Hale and representatives from 25 American companies.

The deal aims to provide the means that will allow each of the two countries to study and discuss any issue of common interest including trade relations and the study of any difficulties that may face their bilateral trade relations and providing solution as well, according to a joint statement.

"Libya is increasingly coming under the radar of potential foreign investors," Philippe Dauba-Pantanacce, senior economist with Standard Chartered Bank Dubai, United Arab Emirates told The Media Line.

"Navigating through the intricacies of the Libyan's red tape can be daunting," he said. "But at the same time, the hydrocarbon rich country represents a land of under tapped opportunities."

"At the end of January, Libya finally approved a law allowing for the establishment of a free-trade-zone designed to attract foreign investment in tourism, trade and services and allowing for the free movement of capital and goods with a ten-year tax break," Dauba-Pantanacce explained.