Saudi Arabia begins at point C, producing 60 barrels of oil and 10 bushels of corn. It then exports some of that oil and receives corn in return. Production stays at C, but consumption moves to D, and D sits outside the frontier. No rearrangement of Saudi labour could have reached it.
Whether D clears the frontier depends entirely on the price. At home, one more bushel of corn costs four barrels of oil, so a barrel is worth a quarter of a bushel. Any trade that returns more than a quarter of a bushel per barrel beats what Saudi Arabia could do for itself, and the panel says which side of that line the current price falls on. The book's example, twenty barrels for twenty bushels, is a price of one bushel per barrel, four times the domestic cost.