Iraq reverses Australian wheat ban

Iraqis are stocking up on government food rations as fears of a U.S. invasion mount

SYDNEY, Australia (CNN) -- Iraq has reversed a decision to ban imports of Australian wheat after personal intervention by a trade delegation.

The delegation persuaded Iraqi officials that the aggressive view of the Australian government towards military action against Iraq was not necessarily shared by the majority of Australians and should not be a factor in determining trade relations.

While Australian Prime Minister John Howard had stated that he wishes to see a "regime change" in Iraq and that he considers military action by the U.S. as likely, recent opinion polls show a clear majority of Australians oppose an invasion of Iraq.

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The Australian Wheat Board delegation, which met Iraqi Trade Minister Dr. Mohammed Mehdi Saleh in Baghdad at the weekend, secured the release of 130,000 tonnes of wheat stranded in ships off the Iraqi coast.

Another 500,000 tonnes of wheat will also be purchased by Iraq as previously contracted, and the wheat board is cautiously confident it can maintain a healthy trading environment with Iraq.

Iraq imports approximately 2 million tonnes of wheat a year from Australia, worth about $450 million (Aust. $830 million) a year.

But that trade had been threatened by Iraq's reaction to aggressive statements by the Australian government, particularly by Foreign Affairs Minister Alexander Downer.

The official Iraqi News Agency reported that the attitude of the Australian government was hindering trade relations but that the stance of the Australian Wheat Board was "a positive and constructive one and reflects a desire to develop co-operation with Iraq."

The INA reports Dr Saleh has confirmed that all the current wheat imports have been regained but warns that situation could again change.

Australian Grains Board chairman Keith Perrett told the Australian Broadcasting Corporation Monday the concessions gained at the weekend were a positive sign, but did not guarantee future exports to Iraq.

"But we are hopeful that the positive signs and the positive statements that are coming out of the Iraqis will lead to further sales and continue the longstanding trade that we have with Iraq," he said.

Howard on Sunday tried to downplay the political implications of the wheat deal while acknowledging the breakthrough had been a "good outcome."

Saying the Iraqi ban had been a "quality issue," Howard said he was glad the situation had been resolved.

"I think it's probably better if we don't try and put what's happened in relation to wheat in any kind of political context," Howard said.

'Diplomatic solutions'

Prime Minister John Howard says Australia will not be blackmailed by Iraq

But the statement from the Iraqi News Agency says the earlier decision to halve the amount of wheat imported from Australia was due to the "hostile position" of the Australian government -- particularly Howard and a number of his government members -- who supported "aggressive threats against Iraq."

A statement released by the Australian Wheat Board Sunday said Dr Saleh "made it clear the Iraqi government and people highly value the relationship, not only with the AWB and Australian wheat growers, but with the Australian nation as a whole."

"Dr Saleh stated he took no pleasure in seeking to reduce future wheat commitments in response to the Australian Government's perceived hostile position towards Iraq," delegation leader Andrew Lindberg said.

The Iraqi government had not forgotten that AWB was the first company to recommence supply of wheat following the cessation of hostilities during the Gulf War, he said.

"The minister made it clear that Iraq wishes to resume and increase future business with AWB on the basis that the Australian government supports diplomatic solutions to the current situation in Iraq," Lindberg is quoted as saying.

'Blackmail'

The wheat board is expecting to meet with officials from the prime minister's office later this week to discuss the outcomes of the Baghdad meeting.

Senior Australian government figures, including Downer and Defense Minister Senator Robert Hill, have said Australia will not be "blackmailed" by Iraqi trade threats to change its stance on political issues.

Howard told radio listeners last week the issue of Iraqi non-compliance on U.N. Security Council resolutions was coming to a head.

"We put ourselves in a position to be aware and abreast of American thinking and developments in America on this issue ... we are not out in front of America. We have not made any commitment (on military action in Iraq)," the prime minister said.

While Australia would prefer that no military action be required, "we have to deal in reality. And the reality is that so far Iraq has, with great impudence, ignored the resolutions of the Security Council," Howard said.

Australia sells about 17 million tonnes of wheat to overseas markets each year, worth $2.35 billion (A$4.33 billion) in 2001.