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World Trade Organization Toolkit : Non-Discrimination Principles

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(a) Most-Favoured-Nation principle

The Most-Favoured-Nation (MFN) principle means that each Contracting Party must grant to every other Contracting Party the most favourable treatment that it grants to any country with respect to imports and exports of products.

The MFN principle as expressed in Article I GATT requires that

Thus, notwithstanding that tariff concessions may be principally negotiated between country A and country B, if either country A or country B makes a binding tariff concession to the other, it must extend exactly the same concession to all other member countries of the GATT.

Despite the apparent easiness of the principle, the application of the MFN principle to specific circumstances does not appear to be always straightforward. A specific problem relates to the notion of "like products.

The MFN is subject to some important exceptions under the GATT. The most striking exception relates to regional trading arrangements."

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