This study is concerned with the impact of differences in labour standards among OECD countries on intra-OECD trade flows. In theory labour costs in relatively high-labour standards' countries are relatively high and therefore competitiveness of labour-intensive industries will be relatively low. In this study an index representing stringency of labour standards in OECD-countries based on judgements of actual labour regulations has been used in a trade flow equation to investigate the effect of labour standards' strictness on foreign trade flows. It is argued that differences in labour standards among OECD-countries affect both labour-and capital-intensive trade flows if these are produced with relatively more highskilled labour. The reason is the higher demand elasticity of high-skilled labour compared with low-skilled labour. Higher labour standards result in higher labour costs in industries that use relatively more high-skilled labour. Labour-intensive exports are negatively affected if they are produced with high-skilled labour while no effect can be found if produced with low-skilled labour. Capital-intensive exports produced with high-skilled labour are also negatively affected while that part of these exports produced with low-skilled labour is positively affected. The relatively low demand elasticity of low-skilled labour combined with high substitution possibilities of capital for lowskilled labour provide an explanation for this result. No significant effect on imports can be found.