![]() ![]() Today's concept of the most favoured nation status starts to appear in the 18th century, when the division of conditional and unconditional most favoured nation status also began. The earliest form of the most favoured nation status can be found as early as the 11th century. 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. Under rules of WTO, a member country is not allowed to discriminate between trade partners and if a special status is granted to one trade partner, the country is required to extend it to all members of WTO. A country which provides MFN status to another country has to provide concessions, privileges, and immunity in trade agreements. Most favoured nation status is given to an international trade partner to ensure non-discriminatory trade between all partner countries of the WTO. The non-discriminatory component of GATT/WTO applies a reciprocally negotiated privilege to all members of GATT/WTO without respect to their status in negotiating the privilege. In bilateral reciprocal relationships a particular privilege granted by one party only extends to other parties who reciprocate that privilege, while in a multilateral reciprocal relationship the same privilege would be extended to the group that negotiated a particular privilege. "Most favoured nation" relationships extend reciprocal bilateral relationships following both the General Agreement on Tariffs and Trade (GATT) and WTO norms of reciprocity and non-discrimination. Together with the principle of national treatment, MFN is one of the cornerstones of WTO trade law. Exceptions allow for preferential treatment of developing countries, regional free trade areas and customs unions. The members of the World Trade Organization (WTO) agree to accord MFN status to each other. There is a debate in legal circles whether MFN clauses in bilateral investment treaties include only substantive rules or also procedural protections. In effect, a country that has been accorded MFN status may not be treated less advantageously than any other country with MFN status by the promising country. The term means the country which is the recipient of this treatment must nominally receive equal trade advantages as the "most favoured nation" by the country granting such treatment (trade advantages include low tariffs or high import quotas). In international economic relations and international politics, most favoured nation ( MFN) is a status or level of treatment accorded by one state to another in international trade. ( Learn how and when to remove this template message) ( April 2009) ( Learn how and when to remove this template message) Please help to improve this article by introducing more precise citations. ![]() This article includes a list of general references, but it lacks sufficient corresponding inline citations. ![]()
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