KUWAIT CITY, May 18 (Xinhuanet) -- In addition to a thaw in their
political relationships during an Arab summit held in the Lebanese
capital of Beirut late March, Saudi Arabia and Iraq, the two Gulf
War foes, have recently stepped up efforts to boost bilateral trade
ties.
   Iraqi Industry and Minerals Minister Mayssar Raja Shlah traveled
to the Saudi capital of Riyadh last Saturday to attend a conference
of Arab industry ministers at the invitation of Saudi Minister of
Industry and Electricity Hashim Ben Abdullah Bin Hashim Yamani.
   It is the first time that an Iraqi minister has led an official
delegation to the oil-rich kingdom since the 1991 Gulf War, sparked
off by Iraq's invasion of Kuwait.
   Last Wednesday, Shlah met in Riyadh with some 25 Saudi investors
and industrialists with the aim of boosting trade volume and
investments between the two countries.
   The Iraqi minister has also reportedly held talks with Saudi
officials over a request by Baghdad to establish a free trade zone
between the two countries.
   "Iraq seeks to open new avenues of cooperation with sisterly
Saudi Arabia and build bridges to boost economic ties, including
through the establishment of a free trade zone," Iraqi Finance
Minister Hekmat Ibrahim al-azzawi was also quoted as saying by the
Iraqi weekly Al-Zawraa.
   Chairman of the Saudi Export Development Center Abdulrahman Al-
Zamil made an announcement after his meeting with Shlah that Saudi
businessmen have been allowed to re-export non-Saudi products to
Iraq, a step expected to benefit both Saudi importers and the Iraqi
market.
   Also last Febuary, Zamil urged local businesses to maximize
their presence in Iraq to avoid losing their market shares to
competitors.
   Ties between Riyadh and Baghdad have been severed since Iraq's
1990 invasion of Kuwait and the ensuing Gulf War when Saudi Arabia
was a launch pad for the U.S.-led military coalition that ended
Iraq's seven-month occupation of Kuwait.
   Saudi Arabia cut off its diplomatic ties with Iraq since then
and has refused to restore them.
   For its part, Iraq has repeatedly criticized Saudi Arabia for
allowing U.S. and British aircraft to use its bases to enforce a U.
N.-sanctioned no-fly zone over southern Iraq.
   However, last January, Saudi Crown Prince Abdullah Ibn Abdul-
Aziz, the de facto ruler of the kingdom, was quoted by a Saudi
newspaper as saying that "Iraq is an Arab country and it has the
right, just as every Arab has the right, to call for Arab
reconciliation, especially with the kingdom and Kuwait."
   At the Beirut summit late March, Iraqi and Saudi leaders shook
hands and embraced each other, a gesture of reconciliation between
the two countries.
   Even before the thaw in political relationships, Saudi Arabia,
the world's largest oil producer and exporter, has been tentatively
restoring trade since 1999 with Iraq under the U.N. oil-for-food
program.
   Recently, trade sources were quoted by Saudi daily al-Watan as
saying that Iraq has awarded Saudi firms trade contracts worth 64.7
million U.S. dollars since the start of the year under the oil-for-
food program, which was in force since December 1996.
   Iraqi Trade Minister Mohammad Mehdi Salah also said last Friday
that Baghdad had imported more that one billion dollars worth of
goods from Saudi Arabia within the framework of the program.
   In 2001, Saudi firms signed contracts worth 298 million dollars
for the export of miscellaneous goods to Iraq after securing the U.
N. approval.
   Iraq has been under U.N. sanctions since its invasion of Kuwait.
The oil-for-food deal allows Baghdad to sell oil to buy food,
medicine and other humanitarian needs to soften the impact of
sanctions on the Iraqi people.
   In addition, Iraq and Saudi Arabia are also preparing for the
reopening of a border post between the two Arab neighbors, which
was closed since Iraq's invasion of Kuwait.
   In 2000, the Saudi government gave its approval for the
reopening of the Arar border crossing to provide Saudi exporters
with direct access to the Iraqi market.
   The Saudi businessmen have earlier complained about the long
delays by the United Nations in completing the bureaucratic
procedure required by the world body along the Saudi-Iraqi border,
saying that the delay will "hamper the flow of Saudi exports,
preventing them from competing with other products in the Iraqi
market."
   The reopening of the post is expected to save Saudi businessmen
between eight and 10 percent of the cost of exporting to Iraq via
Jordan.
   During the past few years, the post has been used only for the
entry of Iraqi pilgrims into the kingdom.  Enditem