mostfavorednation

Most-favored-nation (MFN) is a principle in international trade that requires a country to extend the same concessions to all members of the World Trade Organization (WTO) as it does to any one member. In practice, if a country lowers tariffs or offers other trade advantages to one trading partner, it must offer those same terms to all other MFN partners, subject to certain exceptions. MFN aims to promote non-discrimination and predictable market access in multilateral trade.

The MFN principle is codified in WTO law, notably in General Agreement on Tariffs and Trade (GATT) Article I. Similar MFN obligations exist for services under GATS Article II. The Enabling Clause (1979) allows preferential treatment for developing countries under the Generalized System of Preferences (GSP). Regional trade agreements may provide differentiated treatment to their members under Article XXIV, which is one of the main exceptions to the MFN rule.

In application, MFN primarily affects tariffs and general trade terms, ensuring that concessions granted to one WTO member become available to all others. Exceptions include regional trade agreements and developed-country preferences under special schemes. Some measures, such as quotas or certain subsidy rules, may operate under separate disciplines. MFN does not require identical domestic policies across a country’s entire economy, only equal treatment among its MFN partners.

Critics argue MFN fosters broad, predictable access and lower costs, but others contend it can constrain targeted development strategies and policy space. Proponents emphasize its role in reducing trade discrimination and preserving multilateral trade norms.