ARAR, 23 May 2004 — Direct trade between Saudi Arabia and Iraq via the main border crossing at Arar will resume on June 1 for the first time in 14 years, sources told Arab News.

US-led coalition forces were making preparations on the Iraqi side to revive trade exchange in nine days, they said.

The coalition has earmarked more than $1 million to rehabilitate the border post and pave the way for the resumption of free trade for the first time since the frontier was shut following Iraq’s 1990 invasion of Kuwait.

On the Saudi side, SR14 million have been allocated to upgrade the border post, in addition to some SR36 million spent on development over the past five years, Arar customs chief Isa Abdul Rahman said.

The reopening of the crossing will boost Saudi participation in the reconstruction of Iraq, cutting transport costs for the 15 percent of businesses that now send goods to Iraq via third countries, said Thani Batti Al-Anazi, head of the Chamber of Commerce and Industry in the Northern Province.

Dr. Abdul Rahman Al-Zamil, chairman of the Saudi Export Development Center, said Saudi business was happy with a move likely to benefit both countries.

The Ministry of Petroleum and Minerals has signed a deal to supply refined crude products to Iraq, which will be ferried by truck via the Arar crossing. Some 100 trucks are expected to cross the border daily.

At an international donors conference in Madrid last October, Saudi Arabia pledged $1 billion for the reconstruction of Iraq, saying half of the sum would be directed through the Saudi Development Fund into various projects while the rest would be used to “finance and guarantee exports” to Iraq.

Zamil said Saudi farmers could import fodder from Iraq. “Fodder is one of the major requirements of the Saudi agricultural market as the cost of a barley bag has reached SR40,” he said, prompting the government to subsidize fodder imports to the tune of SR2 billion.

“Saudi exports to Iraq amounted to SR1 billion last year and the figure could cross SR3 billion after the opening” of the crossing, he said.

The Arar crossing was opened only for a short period under the “oil-for-food” program designed to alleviate the impact of sweeping sanctions imposed on Baghdad after ousted President Saddam Hussein occupied Kuwait.

It was closed again when US-led forces invaded Iraq in March 2003.

Iraqi pilgrims carrying special permits also occasionally crossed into Saudi Arabia at Arar.