This chapter discusses the social dimension of the European Union (EU)’s most powerful external policy domain: trade. After an introductory section summarizing the international debate on the inclusion of labour standards in trade policy instruments – the so-called social clause – the chapter focuses on the EU’s position in this discussion. Besides the Union’s role in the World Trade Organization (WTO), we also consider and evaluate its policies promoting core labour standards (CLS) through unilateral and bilateral trade policies. Subsequently, we offer some explanations for the EU’s limited internal ability to reach decisions on, and for its cautious stance in relation to, a social clause. Attention will be paid to four factors: the ideological disposition of EU member state governments; member state concerns about possible creeping EU competences in the area of labour regulations; the fact that trade-related labour standards may be less important for the member states than other trade-related objectives and concerns; and the increased attractiveness of the International Labour Organization (ILO) as an alternative to a WTO-based approach to international labour standards.