What does being a most-favored-nation mean?
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 does MFN mean?
most-favoured nation
What does ‘most-favoured nation’ (MFN) mean? This is a principle of the World Trade Organisation (WTO). It means that WTO members cannot discriminate between their trading partners and must, with a few exceptions, offer access to their market on the same terms for all WTO members.
What is meant by MFN status?
While the term suggests special preference for the country given MFN status, it actually means it would be treated equally as all others. According to the World Trade Organisation rules, countries cannot normally discriminate between their trading partners. This principle is known as the Most Favoured Nation treatment.
What is the Most-Favored-Nation MFN treatment principle?
In essence, the MFN principle obliges a country to refrain from discriminating among its trading partners. A country subject to an MFN obligation must grant any trading partner treatment as favorable as that afforded any other nation, in like circumstances.
What is the difference between most favored nation and national treatment?
The national treatment clause forbids discrimination between a Member’s own national and also the nationals of the Members. The Most-Favoured-Nation treatment clause forbids discrimination among the nationals of Members.
What is most favored nation clause in a contract?
Most favored nation clauses (MFNs), sometimes also referred to as most favored customer clauses, are agreements in which a supplier agrees to treat a particular customer no worse than all other customers (see Standard Clause, General Contract Clauses, Most Favored Customer (www.practicallaw.com/8-510-7389)).
Which country was the first to enjoy most favored nation trading status with the United States?
Almost all U.S. trading partners enjoy MFN status, which simply means a country’s products, when exported to America, are entitled to U.S. tariffs as low as any other nation’s. China was first awarded MFN in 1979, during the Jimmy Carter Administration.
What are the differences between Most Favored Nation MFN and national treatment?
What is MFN treatment in international trade law?
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 does most favored nation treatment mean?
Most Favoured Nation treatment (MFN) A non discriminatory trade policy commitment on the part of one country to extend to another country the lowest tariff rates it applies to any other country.
What is most favoured nation (MFN) treatment?
Most-Favored-Nation Clause Most-Favored-Nation Clause Explained. In international trade, MFN treatment is synonymous with non-discriminatory trade policy because it ensures equal trading among all WTO member nations rather than exclusive trading privileges. The Political Implications of the MFN Clause. Real World Example of a Most-Favored-Nation Clause.
What is a most favored nation clause?
Most favored nation clause. Definition. A most favored nation clause (also called a most favored customer clause or most favored licensee clause) is a contract provision in which a seller (or licensor) agrees to give the buyer (or licensee) the best terms it makes available to any other buyer (or licensee). Sample clause. “.
What is the “most favoured nation” status 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).