This paper provides a detailed analysis of the EU's human rights clause, its external trade and development contexts and its foundation in international and EU law. Since 1992, the EU has included, in all its agreements with third countries, a clause defining respect for human rights and democracy as an 'essential element' of its external relationship. A Council decision of May 1995 spells out the basic modalities of this clause with the aim of ensuring consistency in the text used and its application. The human rights clause is unique to the EU's bilateral agreements, and now applies to over 120 countries. It represents a new model for EU external relations as well as for international cooperation. The EU plays a leading role in the WTO and international economic relations. The human rights clause will have implications for the development of international rules concerning trade-related human rights policy.