6 Most Favoured Nation Treatment

Subject(s):

Most-favoured-nation treatment (MFN) — Specific trade agreements — Sources of international law

This chapter focuses on the Most-Favoured-Nation (MFN) obligation in GATT. It discusses the provisions of GATT Article 1; the MFN in the GATS; and exceptions in MFN. It concludes that the administration of MFN today is paradoxical: while the standards for the application of MFN treatment are very strict and the elements of MFN are all-encompassing, the broad exceptions to MFN for preferential trade agreements and for developing countries sharply restrict the scope and the actual importance of MFN. In fact, it can be stated that in the early part of the twenty-first century, MFN is fast becoming only a quaint exception to the general rule that preferential trade arrangements now rule international trade.