Uncommon
Most favoured nation
Category of trade relationship
Most favoured nation
Most favoured nation (MFN) is concept or principle in international economic relations whereby two states that have most favoured nation with one another will provide the same trade advantages (e.g. lower tariffs or higher import quotas) to one another as they would with a third state. 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 members of the World Trade Organization (WTO) agree to accord MFN status to each other. Exceptions allow for preferential treatment of developing countries, regional free trade areas and customs unions. Together with the principle of national treatment, MFN is one of the cornerstones of WTO trade law. There is a debate in legal circles whether MFN clauses in bilateral investment treaties include only substantive rules or also procedural protections. "Most favoured nation" relationships extend reciprocal bilateral relationships following both the...
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