Linking trade concessions to compliance with internationally recognised labour standards is referred to as a 'social clause'. The social clause is usually depicted as causing division between the (rich) global North and the less-industrialised global South. This article shows, however, that there is diversity of opinion among the labour movements of the global South and that contemporary labour-intensive manufacturing pits countries of the South against one another. The article raises the possibility of a race to the bottom in labour standards, where workers cannot enjoy the fruits of growth because their employers and governments hold on to the competitive advantage of cheap labour. Consider competition between China and Mexico for the North American apparel market: despite enormous employment growth apparel workers have not enjoyed wage growth and their conditions are often appalling. The race to the bottom can be prevented by South-South agreement to honour labour standards.