Most-Favored Nations (MFN) Clause: Treating Others the Same
What is an MFN basis? An MFN basis is a preferential trade arrangement whereby each member country agrees to grant the same trade benefits to all other member countries. The MFN principle is the cornerstone of the World Trade Organization (WTO) and is enshrined in Article I of the WTO Agreement.
What does a most-favored-nation MFN status mean quizlet? MFN status is granted to a country by the World Trade Organization (WTO), and it means that the country is given preferential treatment in terms of trade. The country is allowed to export goods and services to other WTO member countries at lower tariffs than other countries that do not have MFN status.
Which countries have MFN clause? Most-favored-nation (MFN) status is a designation that a country bestows upon another country in order to ensure that it enjoys the same trade advantages as the country's other trading partners. The MFN designation is codified in the General Agreement on Tariffs and Trade (GATT), which was signed by 23 countries in 1947. The MFN status is also known as "normal trade relations" (NTR) in the United States.
MFN status is granted on a nondiscriminatory basis, meaning that a country cannot selectively grant MFN status to only some of its trading partners. All countries that are members of the World Trade Organization (WTO) must grant MFN status to all other WTO members.
Some countries have bilateral free trade agreements (FTAs) with each other that supersede their MFN status. For example, the United States has FTAs with several countries, such as Canada and Mexico, that grant preferential treatment to goods and services traded between the countries.
What is MFN status How does the WTO reconcile the principle of equal treatment with the preferential treatment created by regional trade agreements?
MFN status, or most-favored-nation status, is a designation that a country gives to another country in a trade agreement. The designation means that the country will receive the same trade benefits that it gives to its other trading partners. The WTO reconcile the principle of equal treatment with the preferential treatment created by regional trade agreements by allowing MFN status to be granted to countries within a region.
What are the two exceptions to the most-favored-nation principle? The two exceptions to the most-favored-nation principle are national security and reciprocity. National security exceptions allow a country to discriminate against another country if it is necessary to protect its national security. Reciprocity exceptions allow a country to discriminate against another country if that country does not extend the same treatment to the first country.