BAGHDAD, Sept. 8 (UPI) -- Iraqi traders are buying up cheap, low-quality Iranian goods, taking advantage of open transport routes and newly established ties, Iraqi businessmen said.

Despite budget increases for the Iraqi government, most Iraqis face chronic underemployment, making cheaper Iranian goods attractive to Iraqi customers, the Iraqi daily newspaper Azzaman reported.

"Almost all Iraqi traders have now shifted their attention to Iran," said Mohammed Abbas, a local trader in Baghdad.

Most Iraqis were looking to Iran as an alternative to the more expensive imports coming from China and other markets. Trade posts along the border with Iran offer quick transfer of goods as well, the report said.

Azzaman reported that Iranian air conditioners, for example, cost around $100, while their Chinese equivalent fetched more than $300 in some shops.

Iran is not subsidizing goods to Iraq, though trade between the two countries has increased substantially since the U.S.-led invasion in 2003.

Furthermore, Iran has set up several construction ventures working on rebuilding the Iraqi infrastructure in the Kurdish north and in the southern port region of Basra.

Iraqi Vice President Adel Abdul Mehdi was in Tehran Monday to discuss further economic cooperation and trade relations between the two countries.

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