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This 2005 IISD report analyzes the impact of EU trade policy on conflict in the developing world. It highlights a contradiction: while the EU uses 'soft power' initiatives (like FLEGT and the Kimberley Process) to curb conflict resources and 'carrots' (preferential access) to encourage good governance, its structural policies—such as massive agricultural subsidies and the push for reciprocal Economic Partnership Agreements (EPAs)—can undermine economic stability and fuel conflict. The report warns that commodity price volatility and the 'resource curse' further destabilize low-income countries, and recommends that the EU conduct conflict assessments of trade agreements and reduce agricultural subsidies to promote global peace and sustainable development.