Most favoured nation (MFN), also called normal trade relations in the United States, is a status accorded by one nation to another in international trade. Somewhat counterintuitively, it does not confer particular advantages on the receiving nation, but means that the receiving nation will be granted all trade advantages, such as low tariffs that any third nation also receives. In effect, having MFN status means that one's nation will not be treated worse than anyone else's nation, as reflected by the American term. One of the most influential doctrines in history is that all humans are divided into groups called nations. ... International trade is the exchange of goods and services across international boundaries or territories. ... A tariff is a tax placed on imported and/or exported goods, sometimes called a customs duty. ...

The members of the World Trade Organization, which include all developed nations, accord MFN status to each other. Exceptions exist for preferential treatment of developing countries, regional free trade areas and customs unions. The World Trade Organization (WTO), (OMC - Spanish: , French: ), is an international organization designed to supervise and liberalize international trade. ... A free trade area is a designated group of countries that have agreed to eliminate tariffs, quotas and preferences on most (if not all) goods between them. ... A customs union is a free trade area with a Common External Tariff. ...

History

In the early days of international trade, most favoured nation status was usually used on a dual-party, state-to-state basis. A nation could enter into a most favoured nation treaty with another nation. Generally bilateral, in the late 19th and early 20th century unilateral most favoured nation clauses were imposed on Asian nations by the more powerful Western countries (see Open Door Policy). One particular example of 'most favoured nation' status is the Treaty of Nanking as part of the seriese of unequal treaties. It was implemented in the aftermath of the First Opium War between Great Britain and China Qing Dynasty involving the Hong Kong islands. Alternative meaning: Nineteenth Century (periodical) (18th century — 19th century — 20th century — more centuries) As a means of recording the passage of time, the 19th century was that century which lasted from 1801-1900 in the sense of the Gregorian calendar. ... (19th century - 20th century - 21st century - more centuries) Decades: 1900s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s As a means of recording the passage of time, the 20th century was that century which lasted from 1901–2000 in the sense of the Gregorian calendar (1900–1999... World map showing the location of Asia. ... For alternative meanings for The West in the United States, see the U.S. West and American West. ... – Spheres of influence in China prior to the Open Door Policy. ... The Treaty of Nanjing (Chinese: 南京條約, NánjÄ«ng TiáoyuÄ“) is the agreement which marked the end of the First Opium War between the United Kingdom and China. ... The Unequal Treaties is the name in the English language used by modern China for a series of treaties signed by several Asian states, including the Qing Empire in China, late Tokugawa Japan, and late Joseon Korea, and foreign powers (列強, ì—´ê°•) during the 19th and early 20th centuries. ... Combatants Qing China British East India Company Commanders Daoguang Emperor Charles Elliot, Anthony Blaxland Stransham The First Opium War or the First Anglo-Chinese War was fought between the United Kingdom and the Qing Empire in China from 1839 to 1842 with the aim of forcing China to import British... Flag (1890-1912) Anthem Gong Jinou (1911) Territory of Qing China in 1892 Capital Shengjing (1636-1644) Beijing (1644-1912) Language(s) Chinese Manchu Mongolian Government Monarchy Emperor  - 1636-1643 Huang Taiji  - 1908-1912 Xuantong Emperor Prime Minister  - 1911 Yikuang  - 1911-1912 Yuan Shikai History  - Establishment of the Late...

After World War II, tariff and trade agreements were negotiated simultaneously by all interested parties through the General Agreement on Tariffs and Trade (GATT), which ultimately resulted in the World Trade Organization. The World Trade Organization requires members to grant one another most favoured nation status. A most favoured nation clause is also included in the absolute majority of the numerous Bilateral Investment Treaties concluded between capital exporting and capital importing countries after the second world War. Combatants Allied powers: China France Great Britain Soviet Union United States and others Axis powers: Germany Italy Japan and others Commanders Chiang Kai-shek Charles de Gaulle Winston Churchill Joseph Stalin Franklin Roosevelt Adolf Hitler Benito Mussolini Hideki Tōjō Casualties Military dead: 17,000,000 Civilian dead: 33,000... This article does not cite any references or sources. ... It has been suggested that Commerce be merged into this article or section. ... The General Agreement on Tariffs and Trade (typically abbreviated GATT) was originally created by the Bretton Woods Conference as part of a larger plan for economic recovery after World War II. The GATTs main purpose was to reduce barriers to international trade. ... A Bilateral Investment Treaty (BIT) is an agreement establishing the terms and conditions for private investment by nationals and companies of one state in the state of the other. ...

Most favoured nation relationships contrast with reciprocal relationships, since in reciprocal relationships a particular privilege granted by one party only extends to other parties who reciprocate that privilege, rather than to all parties with which it has a most favoured nation agreement.

Benefits

Trade experts consider MFN clauses to have the following benefits:

• A country that grants MFN on imports will have its imports provided by the most efficient supplier. This may not be the case if tariffs differ by country.
• MFN allows smaller countries, in particular, to participate in the advantages that larger countries often grant to each other, whereas on their own, smaller countries would often be not powerful enough to negotiate such advantages by themselves.
• Granting MFN has domestic benefits: having one set of tariffs for all countries simplifies the rules and makes them more transparent. It also lessens the frustrating problem of having to establish rules of origin to determine which country a product (that may contain parts from all over the world) must be attributed to for customs purposes.
• MFN restrains domestic special interests from obtaining protectionist measures. E.g., butter producers in country A may not be able to lobby for high tariffs on butter to prevent cheap imports from developing country B, because, as the higher tariffs would apply to every country, the interests of A's principal ally C might get impaired.

As MFN clauses promote non-discrimination among countries, they also tend to promote the objective of free trade in general. However, as MFN rules may conflict with other objectives such as regional economic integration (e.g. in NAFTA or the EU), trade agreements usually allow for exceptions. A tariff is a tax placed on imported and/or exported goods, sometimes called a customs duty. ... Swiss Made label on a TAG Heuer chronograph Country of origin is the country of manufacture, production, or growth where an article or product comes from. ... Protectionism is the economic policy of restraining trade between nations, through methods such as high tariffs on imported goods, restrictive quotas, a variety of restrictive government regulations designed to discourage imports, and anti-dumping laws in an attempt to protect domestic industries in a particular nation from foreign take-over... Free trade is an economic concept referring to the selling of products between countries without tariffs or other trade barriers. ... Economic integration is a term used to describe how different aspects between economies are integrated. ... Nafta or NAFTA may refer to: an acronym for the North American Free Trade Agreement an acronym for the New Zealand Australia Free Trade Agreement the town/Tokyo of Nafta, Tunisia This is a disambiguation page: a list of articles associated with the same title. ...

Exceptions

GATT members recognized in principle that the most favoured nation 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. A developing country is a country with low average income compared to the world average. ... This article is about the United Nations, for other uses of UN see UN (disambiguation) Official languages English, French, Spanish, Russian, Chinese, Arabic Secretary-General Kofi Annan (since 1997) Established October 24, 1945 Member states 191 Headquarters New York City, NY, USA Official site http://www. ... 1964 (MCMLXIV) was a leap year starting on Wednesday (the link is to a full 1964 calendar). ...

Another challenge to the most favoured nation 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 most favoured nation status for the People's Republic of China sparked U.S. controversy because of its sales of sensitive military technology and its use of prison labor, and its most favoured nation status was only made permanent in 2000. All of the former Soviet states, including Russia, were granted most favoured nation status in 1992. For the band, see 1990s (band). ... A weapon is a tool used to kill or incapacitate a person or animal, or destroy a military target. ... 2000 (MM) was a leap year starting on Saturday of the Gregorian calendar. ... Soviet redirects here. ... Year 1992 (MCMXCII) was a leap year starting on Wednesday (link will display full 1992 Gregorian calendar). ...

Spelling

The treaties that define MFN, such as 1947 GATT treaty, most commonly use the British spelling of the word Favoured. ^[1] General Agreement on Tariffs and Trade (usually abbreviated GATT) functions as the foundation of the WTO trading system, and remains in force, although the 1995 Agreement contains an updated version of it to replace the original 1947 one. ...

In the United States

In the United States, "most favored nation status" has been renamed Normal Trade Relations (NTR) in 1998 as all but a handful of countries had this status already, making it a misnomer. (The impetus for the change in terminology came from irritation voiced by some Americans that various totalitarian governments around the world enjoyed being a "most favored nation" of the United States).^{[citation needed]} In the United States, Normal Trade Relations (NTR) status refers to what the World Trade Organization and much of the rest of the world still refer to (somewhat misleadingly) as most favoured nation status. ... Year 1998 (MCMXCVIII) was a common year starting on Thursday (link will display full 1998 Gregorian calendar). ... Forms of government Part of the Politics series Politics Portal This box:      Totalitarianism is a term employed by political scientists, especially those in the field of comparative politics, to describe modern regimes in which the state regulates nearly every aspect of public and private behavior. ...

The ideas behind MFN policies can be first seen in US foreign policy during the opening of Japan in the mid to late 1850s, when they were included as a clause in the Commercial Treaty of 1858, which signaled the opening of the Japanese market. // Production of steel revolutionized by invention of the Bessemer process Benjamin Silliman fractionates petroleum by distillation for the first time First transatlantic telegraph cable laid First safety elevator installed by Elisha Otis Railroads begin to supplant canals in the United States as a primary means of transporting goods. ...

In Business (Slang)

Companies often refer to MFN in pricing terms to indicate the recipient of MFN will pay no more than prices offered to another party.

See also

• National treatment

National treatment is a debated (and perhaps abandoned) principle in customary international law, but a vital one to many treaty regimes. ...

References

1. ^ | GATT Treaty (1947)

• W. J. Davey / J. Pauwelyn, MFN-Unconditionality, in: T. Cottier / P. C. Mavroidis (eds.), Regulatory Barriers and the Principle of Non-Discrimination in World Trade Law: Past, Present, and Future, 2000