Abstarct: This study aims to analyze the effects of economic-geopolitical variables on regional trade and sustainable development in the Republic of Iraq and its neighboring countries (Iran, Turkey, Jordan, and Kuwait). Utilizing panel data and fixed and random effects econometric models, this research investigates the pivotal role of transport infrastructure, political stability, legal harmonization, and regional cooperation in increasing trade volume and enhancing sustainable development. The findings indicate that investment in transit infrastructure has a significant positive elasticity on trade volume (each 1% increase in investment leads to a 0.8% increase in trade), while geopolitical indicators such as border security and political stability are primary determinants of investment risk and confidence. Furthermore, sensitivity analysis suggests that geopolitical shocks can have significant negative impacts on trade; however, the implementation of coordinated regional policies and infrastructure improvements can mitigate these effects by up to 40 percent. This study emphasizes that sustainable development is unattainable without economic integration and political stability. It proposes that policymakers focus on modernizing infrastructure, standardizing customs regulations, strengthening human capital, and establishing shared risk management mechanisms to create a sustainable ecosystem for regional trade. The results demonstrate that shifting from bilateral cooperation to regional integration is key to achieving competitive advantages and long-term development in the Middle East.