Next Step : Iraq Rehearses Its Pitch : A newly secure Saddam Hussein hopes to persuade Clinton’s Administration to lift trade sanctions.

President Saddam Hussein’s trusted minister of trade did not want to talk politics one recent morning in his well-appointed office--a key regime power center in the heart of Baghdad, heavily guarded by soldiers and filled with the remembrances of war.

It was the day the much-reviled President Bush was defeated at the polls, but Mohammed Mehdi Saleh wanted only to talk about Chevys, Oldsmobiles, Kansas wheat, Gerber baby food and, yes, Arkansas rice--all elements in what quickly became clear as a centerpiece of Hussein’s political strategy.

“Do you realize that Iraq used to be, before the sanctions, the largest buyer in the world of rice from the United States?” Saleh, a technocrat in Iraqi army fatigues with a doctorate in planning from Britain’s University of Manchester, asked rhetorically.

“One-quarter of the entire United States’ foreign trade of rice was bought annually by Iraq before the war--$2 billion a year,” he added during a rare interview that apparently contained some exaggeration. (Annual rice sales to Iraq were $133 million in 1989, according to the U.S. Commerce Department.)

“We bought from General Motors in 1989 and 1990 a quarter-billion dollars worth of Oldsmobile and Celebrity cars, which are running in the street here right now,” the minister continued. “And General Motors engaged with the Ministry of Industry to build up to 120,000 units of cars per year” in a factory near Baghdad that remains half-finished.

All that, of course, was before Iraq’s invasion of Kuwait, the U.S.-led war to end Baghdad’s occupation of the emirate and the severe U.N. trade embargo that together tore U.S.-Iraqi relations to bits.

Had the assembly plant in Iraq started production, Saleh added with a pointed smile, “it could help General Motors to maintain their market and to maintain their employees--where now they are declining.”

Then came the closer: official Iraqi documents listing seven large U.S. corporations that already have signed letters of intent to supply the country with $100 million worth of food and medicine the moment Washington and the United Nations decide to permit such trade with his ministry.

The message was unmistakable: If President-elect Bill Clinton is indeed more concerned about the U.S. economy than about the affairs of nations thousands of miles from America’s shores, he should lift the embargo that has blocked large-scale U.S. exports to Iraq and banned Iraqi oil exports--and, in the process, create and save American jobs.

Self-serving, yes. And unlikely to impress President-elect Clinton any more than it would President Bush.

But the trade minister’s message was also an indication that for the short term, at least, Hussein has opted for a tone of peace and cooperation with the incoming Administration, rather than provoking a confrontation that would test the will of a new Democratic President already pledged to be tough on tyrants.

More than that, it suggests that Hussein will try to use the changing of the guard in Washington as a window of opportunity--however narrow--to try once more to break out of the international isolation that has crippled his economy, torn deeply into Iraq’s social fabric and cut him off from the global trade that could make this oil-rich nation one of the richest in the world.

It is a strategy based largely on the Iraqi leader’s newfound sense of personal strength, safety and almost messianic confidence, according to dozens of expert Iraqi and expatriate Saddam watchers interviewed during a recent 10-day tour of postwar Baghdad.

These analysts said the Iraqi leader is now convinced he is personally responsible for the defeat of President Bush--a man the authoritarian Iraqi leader viewed as a personal adversary in a conflict of almost biblical proportions.

“Yesterday Thatcher, Gorbachev and Schwartzkopf; today Bush,” declared a red-banner headline in a special U.S. election-day edition of the Baghdad daily Babel, a newspaper owned by Hussein’s eldest son, Uday. The article implicitly credited the Iraqi leader for the fading stardom of world leaders who stood against him in last year’s Persian Gulf War.

“And tomorrow, God willing, will be the end of (Saudi Arabia’s King) Fahd and (Egyptian President Hosni) Mubarak,” the paper added ominously.

That was just the most recent insight into Saddam Hussein and his regime afforded by the family paper that most analysts see as a key to the mercurial Iraqi leader’s thoughts.

In a narrative earlier this year recounting the regime’s version of the allied air war that bombarded Iraq for two months in 1991, the newspaper described in detail how Hussein was allegedly saved when a British Tornado fighter pilot launched four missiles at him from point-blank range.

First, the account asserted, Saddam split into four. Then, as the missiles approached, a laser beam emanating from the holiest of Islamic shrines in Mecca sliced through the sky, covered the Iraqi leader in a shield of light and destroyed the missiles.

“It’s hard to say whether Saddam actually believes this sort of thing,” said one Far Eastern diplomat who is a veteran analyst of the Iraqi regime. “But many of his people do. At least they’re afraid it might be true. And the point is, things like Bush’s defeat . . . and the collapse of the Soviet Union really do feed it.

“But the so-called bottom line is, all of it has contributed to this internal sense of the invincibility of Saddam, a bedrock of survival that he will now use to confront his remaining enemies and search for new friends with a single-minded goal--to rebuild Iraq into what it was, beginning by breaking the U.N. trade sanctions against him.”

Longer-term regime watchers in Baghdad have little doubt that the Iraqi president is as committed as ever to rebuilding his nation into a military power that ultimately could confront his traditional enemies--the Persian fundamentalists of Iran to the east and what Hussein calls “the Zionist imperialists” in Israel to the west.

“Saddam is not what you would call a peacetime president,” said one longtime student of the Baghdad regime.

As evidence, analysts cite Iraq’s steadfast refusal to disclose to U.N. weapons inspection teams the names of European, Asian and even North American companies that provided it with the technology and equipment for its nuclear, chemical and biological weapons programs.

Although Iraq asserts that it does not want to aid in the criminal prosecution of those who acted in friendship, most officials in the U.N. Special Commission charged with crippling its capacity to build weapons of mass destruction insist that Baghdad merely seeks to keep the pipeline intact.

It is Iraq’s intransigence on the weapons issue that remains the United Nations’ single strongest justification for maintaining sanctions against Iraq.

Several other diplomats in the region contend that Iraq’s history of using its frozen assets for purchases of food and medicine--which are permitted under the complex U.N. sanctions--shows that the Iraqi president is trying to preserve those assets for some other purpose.

One European businessman who recently signed a contract to deliver thousands of tons of sugar, for example, took his documents to many of the foreign banks that are holding Iraq’s frozen assets. “The banks agreed to apply for U.N. approval to release the money,” said one diplomat familiar with the transaction. “But they all told him he needed authorization from the Iraqis, who refused to provide it. It seems they’re trying to save these assets for some other things.”

Trade Minister Saleh flatly denied the accusation. It is partly a diplomacy problem, he said. In order to authorize release of some of the assets, Iraq must recognize the legitimacy of a special U.N. account authorized to administer them--an account created by a resolution that Baghdad has formally rejected.

But the greatest hurdle, Saleh insisted, is official U.S. policy barring the release for any purpose of Iraqi assets now in American banks--about half the $4 billion in frozen assets worldwide.

“The United States has refused to release any of these dollars, although Iraq concluded many big contracts with American companies since the (U.N.) resolution has been adopted,” the minister stated. “And with the British, French and Germans, the total amount of contracts that were concluded since the cease-fire exceeds $4.5 billion to buy food and medicine.

“But these contracts are still (only) on paper . . . because we have almost 50% of our frozen assets in the United States.”

In a clear effort to tantalize the new Administration, Saleh added: “Iraq has made some effort internationally to release around $120 million from Switzerland, Italy has released 10% of their total amount . . . Canada has decided to release all our frozen assets although it doesn’t exceed $3 million. England has released 70 million pounds, or $120 million. So we have utilized this amount of money to buy food and medicine”--items Saleh said Iraq would be pleased to negotiate for purchase from the United States instead.

In fact, Saleh said, virtually everything is now open to negotiation with the new U.S. Administration--everything, he said, but the continuing presence of the Iraqi leader himself.

As he took his American guest on a tour of a private museum of war destruction adjacent to his office, the minister stressed what many foreign diplomats and analysts have confirmed: If anything, the sanctions have made Saddam Hussein stronger in a nation that now depends almost entirely on his regime and its subsidized distribution of basic foods and medicine for daily survival.

“Iraqi people do not sell their leadership for food or any kind of material things,” Saleh said. Hussein, he added, remains “a symbol for Iraq. And each Iraqi knows he is our symbol. The insiders all say, ‘Saddam, we love him; we sacrifice for him.’ You know this slogan? ‘Bush, Bush listen clearly. We love Saddam Hussein.’ ”

Asked whether that slogan will now be altered to replace Bush’s name with Clinton’s, Saleh laughed heartily. “How shall I put it? We won’t say anything until the U.S. Administration says something first.

“But really, if they believe in human rights and they believe in a strong United States economy, they should lift these sanctions. We are willing. Your companies are willing. Now, we are all just waiting.”

WHAT’S AT STAKE

Trade trends between the United States and Iraq before the February, 1991, U.N. embargo In millions of U.S. dollars Total U.S. exports to Iraq 1985: $427 1990: $640 Total U.S. imports from Iraq 1985: $491 1990: $3,247 Source: Direction of Trade Statistics Yearbook

Trading Oil for Food

LEADING U.S. COMMODITY IMPORTS FROM IRAQ, 1989 (In thousands of U.S. dollars) By far, oil was America’s No. 1 import from Iraq. But trade was cut off after Iraq’s invasion of Kuwait in 1990. Petroleum products: $2,403,942 Dates: $1,784 Vegetable saps & extracts of licorice: $512

SAMPLE OF U.S. EXPORTS TO IRAQ, 1989 (In thousands of U.S. dollars) Wheat: $179,075 Rice: $132,881 Prepared poultry feed: $87,164 Soybean oil products: $71,098 Corn: $63,684 Cotton: $35,605 Tobacco: $32,362 Sugar: $31,958 Dairy products: $15,027 Source: U.S. Department of Commerce