The document discusses most favoured nation (MFN) status in international trade. It provides the following key points: 1. MFN status is granted by one country to another to ensure equal trade advantages like reduced tariffs. It prevents discrimination among trading partners. 2. All WTO members must treat each other equally as trading partners. If benefits are given to one country, the same benefits must be extended to other WTO members. 3. Developing countries receive special consideration under MFN status and trade agreements like GSP. MFN status aims to promote fair and non-discriminatory trade.

2. MOST FAVOURED NATION
• A most favoured nation clause is a level of status given to one
country by another and enforced by the World Trade Organization.
• A country grants this clause to another nation if it is interested in
increasing trade with that country.
• Countries achieving most favoured nation status are given specific
trade advantages such as reduced tariffs on imported goods.

4. WHY “MOST-FAVOURED ”?
Sounds like contradiction suggesting special
treatment
But, actually means non – discrimination –
treating virtually everyone equal
Each member treats all other members
equally as trading partners
If a country improves the benefits given to one
trading partner, it has to provide the same “best”
treatment to all other WTO members.

6. • Special consideration is given to countries that are classified as
"developing" by the World Trade Organization.
• GSP … Generalized System of Preferences
• The MFN status proclaimed in the GATT has been
granted to about 180 countries. Only a handful of communist countries
have been denied MFN status.

7. • MFN status is a method of preventing discriminatory treatment
among members of an international trading organization.
• MFN status provides trade equality among partners by ensuring
that an importing country will not discriminate against
another country's goods in favour of those from a third
• Once the importing country grants any type of concession to
3rdparty country, this concession must be given to all other
countries

8. • MFN is so important that it is the first article of the (GATT), which
governs trade in goods.
• MFN is also a priority in the General Agreement on Trade in
Services (GATS) and the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS) although in each agreement the
principle is handled slightly differently.
• Together, those three agreements cover all three main areas of trade
handled by the WTO

9. Exceptions
• GATT members recognized in principle that the
"most favoured nation" rule should be relaxed to
accommodate the needs of developing countries, and
the UN Conference on Trade and
Development (established in 1964) has sought to
extend preferential treatment to the exports of the
developing countries

10. MOST FAVOURED NATIONS
CONDITIONAL
MFN
STATUS
UNCONDITIONAL
MFN
STATUS

11. Conditional & Unconditional MFN
11
A
The United States
↓
Conditional MFN
↓ (WWI)
Unconditional MFN
↑
Free ride
Least common denominator
↓ (WTO)
Single undertaking idea
C
B
Must grant privilege
grant privilege
MFN

12. Benefits

13. Due to MFN status, countries’ cannot protect
their industries from cheaper goods produced
by foreign countries
Some get wiped because they can’t compete
Without tariffs, some countries subsidize their
domestic industries – allows them to export at
incredibly cheaper rates (also known as
DUMPING)
DISADVANTAGES

14. America MFN
• Currently, the only countries with Column Two
status are Cuba and North Korea are Not
Favoured By America
• In 1998, in America, “MFN” has been
Renamed as “Permanent Normal Trade
Relations” (NTR).

15. RUSSIAN MFN
• The major beneficiaries of Russia are Brazil, China, Turkey,
Ecuador, Argentina, South Korea, Iran and India.
• The report on preferential trade treatment of Belarus,
Kazakhstan and Russia in favour of developing and least
developed countries
• All of the Former Soviet States, Including Russia Were Granted
MFN status in 1996, but in 1996 the U.S. could not grant MFN
status to some members of the Former Soviet Union, Including
Russian Federation, Because of the Jackson-Vanik Amendment.

26. THANK YOU