This Briefing Paper reviews recent policy and legislative developments on the social clause in the USA, identifies some of the inherent difficulties such legislation will encounter, and looks at European Community initiatives on labour conditions and trade. It summarises the findings of recent ODI research, which indicates that in the countries studied and especially in their export sectors, labour conditions are not untypically poor given their level of development. The paper argues that the case for singling such countries out for trade sanctions is therefore weak.