author(s)
Abeer Abaas Hamadi

abstract
Foreign trade is considered a crucial instrument for the state due to its positive impact on increasing national income, driving economic transformations in the national economy, and ensuring the availability of essential consumer goods. The research is based on the hypothesis that foreign trade, through its various economic activities, can contribute to the development of the national economy and the growth of national income. The study relies on the theoretical aspect to define foreign trade, highlight its significance, discuss its policies, and examine some of the reasons behind engaging in foreign trade. The practical aspect of the study also explores the major obstacles facing foreign trade, the most significant of which is the trade balance deficit. Despite the relatively low contribution of trade to Iraq’s national income, this percentage remains high when excluding crude oil exports. In such a case, the trade surplus would turn into a persistent deficit. Additionally, the research analyzes key economic indicators related to foreign trade for the period (2003-2022). The study concludes that during the research period, exports recorded the highest contribution to the trade balance at the expense of imports. However, this was primarily due to oil exports rather than local investments, which played a role in stimulating the multiplier effect in national income. The most significant recommendation is to diversify Iraq’s exports to reduce dependence on crude oil and invest oil revenues in revitalizing various sectors, including industry, trade, agriculture, and services.