When Andrew Young flew to Saudi Arabia in March as Atlanta's globetrotting mayor, sheiks and princes fought over his hotel bills, courted him with expensive gifts and burned $8,000-a-pound incense at his feet.

High-level officials sought audiences. There were feasts in his honor. Bazaars were kept open so he could shop, even as mullahs called people to prayer. Servants hovered. Limousines whisked him about the desert.

Once the controversial U.S. ambassador to the United Nations, Young used the chance to pitch his latest foreign-policy initiative: southern fried capitalism. He invited the the Arabs to scout Atlanta for opportunities. Two months later, they are here.

Almost 70 Saudis, including prominent Saudi businessmen and top government officials who rarely get together back home, jetted in from Jeddah, Riyadh and London for a two-day conference to hunt joint venture partners and talk trade with 300 American businessmen and bankers.

They watched President Reagan, via satellite hookup today, vow to fight protectionist measures impeding foreign trade. But, moments later, Secretary of Commerce Malcolm Baldrige drew hisses when he said there were no plans to grant favored-nation status to Saudi Arabia.

Young responded later to applause: "I've been accused of being a mayor with a foreign policy. I plead guilty. If you can't trust your government's foreign policy, somebody's got to work on one."

Sponsored by The Saudi Gazette, an English-language daily, and the U.S. Chamber of Commerce, the conference, which ends today, was billed as a seminar to educate Americans on how to penetrate a technology-hungry Saudi marketplace as it copes with oil price drops and declining revenues.

But more than anything, the conference highlighted Young's enduring role as an ambassador in exile to the Third World. Not a week goes by that some visitor from Nigeria or Senegal or Jamaica doesn't sign the guest register in City Hall.

Young remains an international superstar almost four years after he lost his job as President Carter's U.N. ambassador for secretly meeting with a Palestine Liberation Organization official to discuss the Palestinians' plight.

"We Arabs are very loyal people. We remember things like that," said Abdullah Alireza, a Saudi entrepreneur.

"He's a guy who showed he cared and suffered in the process," agreed Michael P. Saba, U.S. director of OKAZ, a Saudi communications company that owns The Saudi Gazette. "Arabs owe a debt in eternity to Andy Young they may not be able to repay in this generation."

Prominent Saudi officials in attendance included Fouad Farsy, deputy minister of industry and electricity, and Faisal Bashir, who advises the quasi-government agency SABIC on how to spend billions of dollars in seed capital.

There was Abdul Aziz Dakheil, chairman of the Saudi Investment Banking Corp., and Gaith Pharaon, the entrepreneur who bought the National Bank of Georgia from Bert Lance, Carter's former budget director.

Pharaon said in an interview that his bank "would play a role" in funneling Saudi money into a variety of ventures in the Southeast. His corporate headquarters are in Savannah.

Among those who approached Pharaon was Milton Harris, a frozen food processor from New Orleans. He wanted to ship frozen sides of beef to Saudi Arabia, but was thwarted by religious laws governing ritual slaughter.

"How about chickens?" he asked.

"We like chickens," said Pharaon. "But you can't compete with France and Brazil. They subsidize their market."

Carter, in an impassioned speech, urged the Saudis to use their influence to "bring about change for the common good."

The Saudis grinned as former Georgia governor Carl Sanders, only half-jokingly, introduced Young to the conference as "Sheik Andy."