The study was intended to shed light from a regulatory standpoint on the role of foreign policy instruments in affecting environmental policy changes in other countries. The analysis resulted in a catalog of environmental priciples for a future world trade arrangement and proposed certain adaptations to the WTO/GATT regulations allowing single states to pursue legitimate extraterritorial environmental objectives by means of trade policy.First of all, to this end, the international legal framework had to be sketched in an effort to map its application to foreign trade and environmnetal protection. The consequent empirical and theoretical economic analysis probed the extent to which free trade may involve inherent tendencies towards worldwide levelling and undermining of standards of production and production processes. The central aspect, however, to be investigated in depth in this study is a general assessment of environmental standards in international trade from a regulatory perspective. This includes questions, among others, of static and dynamic efficiencies and of the degree of consistency attained with respect to set objectives and in terms of systematic integration. Moreover, issues of institutional manageability and especially with respect to the subsidiarity and legitimacy of foreign policy measures motivated by environmental concerns. Legitimation was gained from drawing on principles of international law and in a recourse to contract theoretical arguments.