Most favored nation treatment

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After the MFN principle , even MFN clause or short MFN called ( English nation most favored ; MFN principle ) must trade benefits granted to a contractor as part of the equality all parties be granted. This should make it impossible to grant trade concessions to just one or a few states.

The concept of most favored nation treatment goes back at least to the 17th century. In the second half of the 18th century at the latest, a most-favored-nation clause was part of almost all trade contracts and thus became an important part of international trade .

The “most favored nation clause” does not grant any particular advantages. Rather, it ensures that the country concerned is treated according to the same customs regulations that apply to all other countries with which normal trade relations are maintained. That is why the denial of most-favored nation treatment means that a country is disadvantaged. The expression is explained by the traditional formulation in intergovernmental trade agreements, "Country A grants country B that country B is treated in country A no worse than the country A's most favored country".

Current form in the WTO

This principle, together with the so-called national treatment of all contract works of the most important foundation WTO (World Trade Organization, briefly WTO), by which the General Agreement on Tariffs and Trade (General Agreement on Tariffs and Trade, in short GATT), the services agreement ( General on Agreement Trade in Services , GATS for short) and the Agreement on the Protection of Intellectual Property ( Agreement on Trade-Related Aspects of Intellectual Property Rights , TRIPS for short) fall. It is standardized in Art. I GATT and Art. II GATS, among others.

Free trade zones violate the most favored nation clause, as tariff preferences are only granted to members of the free trade zone. Third countries are disadvantaged ( discriminated ) by the resulting diversion of trade flows . Article XXIV of the GATT Treaty, however, grants exceptions for free trade zones due to the trade-creating effect for the members, provided that these internally eliminate all tariff and non-tariff trade barriers for almost all trade and the external tariff towards third countries is not increased. As a result, for example, the European Union does not have to grant trade benefits to third countries from its internal market . For further exceptions, see the article on GATT .

See also


  • Stefan Kramer: The most favored nation . In: Law of the International Economy . (RIW). Verlag Recht und Wirtschaft GmbH, 1989, ISSN  0340-7926 , p. 473-481 .
  • Kai Petra Dreesen: Discrimination through differently favorable EC-internal double taxation agreements and most-favored nation law obligations . Publishing house Dr. Kovac, Hamburg 2010, ISBN 978-3-8300-4819-0 .

Individual evidence

  1. Haberler, G. (2013). International trade: theory of global economic relationships and presentation and analysis of foreign trade policy. Springer publishing house. P. 268.
  2. Herber, H., & Engel, B. (2013). Economics for bankers. Springer publishing house. P. 189.

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