What is most-Favoured-nation treatment principle?

“Most-Favoured-Nation” (“MFN”) treatment — requires Members to accord the most favourable tariff and regulatory treatment given to the pro- duct of any one Member at the time of import or export of “like products” to all other Members. This is a bedrock principle of the WTO.

What meant by most favored nation and national treatment?

A most-favored-nation (MFN) clause requires a country to provide any concessions, privileges, or immunities granted to one nation in a trade agreement to all other World Trade Organization member countries. Although its name implies favoritism toward another nation, it denotes the equal treatment of all countries.

What is the MFN treatment under the GATS?

MFN essentially means treating one’s trading partners equally on the principle of non-discrimination. Under the GATS, if a country allows foreign suppliers in a sector, equal opportunities in that sector should be given to service providers from all other WTO members.

What is the national treatment principle?

The national treatment rule prohibits countries from using domestic taxes and regulations to offset the value of tariff concessions and is, therefore, a significant tool in promoting trade liberalization. National treatment provisions, as well as the MFN clause, are often invoked in WTO disputes.

What is the most favored treatment?

Most-favoured-nation (MFN): treating other people equally Under the WTO agreements, countries cannot normally discriminate between their trading partners. Grant someone a special favour (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members.

What is most favored nation clause in a contract?

Most-Favored Nations (MFN) clauses (also known as antidiscrimination clauses or most-favored customer clauses) are common in business today. These provisions require that the supplier will treat a particular customer no worse than all other customers (and sometimes even better).

What is the difference between MFN and national treatment?

without discrimination — a country should not discriminate between its trading partners (giving them equally “most-favoured-nation” or MFN status); and it should not discriminate between its own and foreign products, services or nationals (giving them “national treatment”);

What is the most favored nation status?

Most Favoured Nation status is given to an international trade partner to ensure non-discriminatory trade between all partner countries of the WTO. In a nutshell, MFN is a non-discriminatory trade policy as it ensures equal trading among all WTO member nations rather than exclusive trading privileges.

What does being a most favored nation mean?

Most-favored-nation (MFN) status is an economic position in which a country enjoys the best trade terms given by its trading partner. That means it receives the lowest tariffs, the fewest trade barriers, and the highest import quotas (or none at all). In other words, all MFN trade partners must be treated equally.

What does it mean to have most favoured nation treatment?

Written By: Most-favoured-nation treatment (MFN), also called normal trade relations, guarantee of trading opportunity equal to that accorded to the most-favoured nation; it is essentially a method of establishing equality of trading opportunity among states by making originally bilateral agreements multilateral.

What does it mean to be the most favoured nation?

Most-favoured-nation treatment (MFN), also called normal trade relations, guarantee of trading opportunity equal to that accorded to the most-favoured nation; it is essentially a method of establishing equality of trading opportunity among states by making originally bilateral agreements multilateral.

Where is the principle of national treatment found in the WTO?

This principle of “national treatment” (giving others the same treatment as one’s own nationals) is also found in all the three main WTO agreements (Article 3 of GATT , Article 17 of GATS and Article 3 of TRIPS ), although once again the principle is handled slightly differently in each of these.

What was the most favoured nation trading system?

The most-favoured-nation (MFN) principle is a cornerstone of the multilateral trading system conceived after World War II.