most-favored-nation clause

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Related to Most favoured nation: National treatment

most-favored-nation clause

(MFN), provision in a commercial treaty binding the signatories to extend trading benefits equal to those accorded any third state. The clause ensures equal commercial opportunities, especially concerning import duties and freedom of investment. Generally reciprocal, in the late 19th and early 20th cent. unilateral MFN clauses were imposed on Asian nations by the more powerful Western countries (see Open DoorOpen Door,
maintenance in a certain territory of equal commercial and industrial rights for the nationals of all countries. As a specific policy, it was first advanced by the United States, but it was rooted in the typical most-favored-nation clause of the treaties concluded
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). In the late 20th cent. tariff and trade agreements were negotiated simultaneously by all interested parties through the General Agreement on Tariffs and TradeGeneral Agreement on Tariffs and Trade
(GATT), former specialized agency of the United Nations. It was established in 1948 as an interim measure pending the creation of the International Trade Organization.
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 (GATT), which ultimately resulted in the World Trade OrganizationWorld Trade Organization
(WTO), international organization established in 1995 as a result of the final round of the General Agreement on Tariffs and Trade (GATT) negotiations, called the Uruguay Round.
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. Such a wide exchange of concessions is intended to promote free tradefree trade,
in modern usage, trade or commerce carried on without such restrictions as import duties, export bounties, domestic production subsidies, trade quotas, or import licenses.
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, although there has been criticism of the principle of equal trading opportunities on the grounds that freer trade benefits the economically strongest countries. GATT members recognized in principle that the MFN rule should be relaxed to accommodate the needs of developing countries, and the UN Conference on Trade and Development (est. 1964) has sought to extend preferential treatment to the exports of the developing countries. Another challenge to the MFN principle has been posed by regional trading groups such as the European Union, which have lowered or eliminated tariffs among the members while maintaining tariff walls between member nations and the rest of the world. In the 1990s continued MFN status for China sparked U.S. controversy because of its sales of sensitive military technology and its use of prison labor, and its MFN status was only made permanent in 2000. All of the former Soviet states, including Russia, were granted MFN status in 1992.
References in periodicals archive ?
In an interview with Arab News in Riyadh, he said we do not talk about Most Favoured Nation any more.
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.
Pakistan announced in 2011 that it would grant India most favoured nation trading status, something India did in 1996.
In an interview to a British media, minister said the recommendation to grant India the most favoured nation has ended and now Non-Discriminatory Market Access (NDMA) status with India is being considered adding that it will only be granted if India makes prominent reduction in duties imposed on imports of Pakistani products especially the textile products.
11 ( ANI ): Pakistan's Finance Minister Ishaq Dar has said India is unlikely to be granted Most Favoured Nation (MFN) status before 2014 Lok Sabha elections in wake of public pressure following the Line of Control (LoC) incidents in Jammu and Kashmir.
Canada's appeal concerned the alleged incompatibility of the Auto Pact with the Most Favoured Nation clause, and the Panel findings that production to sales ratio as an export performance subsidy were prohibited under the WTO Agreement on Subsidies.
Finance Minister Ishaq Dar said that Pakistan is moving forward with eliminating the negative list on trade with India and extending most favoured nation status to it and shifting to 'sensitive list' under SAFTA (South Asia Free Trade Arrangement) regime to facilitate increased regional trade.
ISLAMABAD -- Minister for States and Frontier Region (SAFRON) Abbas Afridi on Wednesday apprised the National Assembly that India had not yet been granted the most favoured nation (MFN) status.
He expressed grave concern at Pakistan's decision to grant the Most Favoured Nation to India.
Pakistan is in the process of normalizing trade relations with India which will culminate in the grant of Most Favoured Nation (MFN) status to it, Minister of Commerce Makhdoom Amin Fahim said.
10 ( ANI ): Pakistan Foreign Secretary Jalil Abbas Jilani has said the country has reservations over giving India the status of Most Favoured Nation (MFN).
The Federal Ministry of Commerce's decision to grant the Most Favoured Nation (MFN) status to India immediately and to do away with the restrictive positive list by the end of this year will have wide ranging impact on our nation's economy.

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