A strong cooperation between Turkey and Northern Iraq would mean many oppurtunities in the region. Peace between them can lead to long term prosperity that had ever lived in Mesopotamia.
In realpolitik, this is what Turkey should do actually. During the "Cold War" its foreign policies were much more tied to Western interests.In order not to lose time with inner struggles it should somehow find a way to decrease the tension and develop strong relationship with Northern Iraq. By this way in long term both Turkey and Northern Iraq will benefit from this peace. Of course this "close friendship" will have some rivalries and these countries will not be happy with this cooperation. Despite this kind of problems, Turkey should focus on this issue and should stop inner porblems fastly and try to find ways to develop relationships with Northern Iraq and later with Azerbaijan and Georgia.