Europeans currently reflect on how to express and promote human rights and solidarity in their common institutions in the new Constitutional Treaty now facing ratification. What is the scope of toleration towards states that violate human rights, within and beyond its borders? And what is the scope of permissible economic inequality across states in such a federation of democracies committed to domestic solidarity? John Rawls' Law of Peoples sought to be a plausible extension of a liberal conception of justice for a domestic regime to a Society of Peoples, laying out "the ideals and principles of the foreign policy of a reasonably just liberal people". The mixed reception of The Law of Peoples suggests that better justifications are required on at least two counts, concerning respect for states that deny its citizenry certain human rights, and concerning standards for distributive justice. The paper develops aspects of a theory of federal justice to offer further - and perhaps better - Liberal Contractualist arguments regarding these two issues. The European Union may need a differentiated human rights policy, and denies that the Difference Principle, even if appropriate for domestic justice, should apply to a federal order. Disagreements with Rawls' Law of Peoples largely concern the arguments offered for these conclusions.