most-favored-nation clause

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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.
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References in periodicals archive ?
"India should withdraw the most favoured nation (MFN) status from China, impose more restrictions on Chinese products and take immediate action to raise tariff duties on all Chinese imports," the SJM said in a letter to the Prime Minister citing that the government has already done so with Pakistan
On February 17, Prime Minister's Advisor on Commerce Razak Dawood had hinted strict action against India's decision to withdraw the status of Most Favoured Nation (MFN) for Pakistan.
'India has withdrawn MFN (most favoured nation) status to Pakistan after the Pulwama incident.
Most Favoured Nation (MFN) status is given to a trade partner to ensure non-discriminatory trade between two countries.
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.
Summary: Pakistan will grant Most Favoured Nation (MFN) status to India by the end of 2013 in order to promote bilateral trade to the level of $10 billion in next few years, say sources.
"Other issues such as the Most Favoured Nation Clause and the Export Taxes are more complex and will probably need to be addressed in the context of a global deal," the Ambassador said.
The Vietnamese Ministry of Finance issued circular recently outlining changes in the Most favoured Nation Import Tariffs (MFN) on a number of key agricultural products -- including MSG.
The UAE has the lowest trade barrier among the Gulf countries with an average tariff of 2.96 per cent under the most favoured nation status agreements, a report said.
In its renegotiations, the Anglican church has invoked the "most favoured nation" clause in its agreement that states that if the federal government reaches more favourable terms with another denomination involved in the residential schools, Anglicans can ask for the same terms.
A key membership benefit is the 'most favoured nation' principle, where all countries pay the same import duties when exporting particular products to a member country.

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