The liberal peace paradigm (of trade interdependency as supportive of peace) has shaped the modern perception regarding conflict resolution. In an interdependent world of guns and butter, the importance of economics as both a punitive and incentive tool is more central than ever. However, international conflicts are now on the rise and becoming more protracted, violent, intractable, fragmented, and asymmetric in nature. Often, the deterioration occurs in conflicts between neighbouring countries. This chapter reviews the role of the liberal peace theory in the international order (Sect. 2.1), its strands, development of approaches (Sect. 2.2), and the emergence of the key sub-theory of economic diplomacy (Sect. 2.3). Considering the modern evolution of conflicts and its effects on the intractable, identity-based, deep-rooted conflict transformation into an asymmetric one, the last section addresses its resolution through trade (Sect. 2.4).