With reference to the Most Favoured Nation MFN consider the following statements It is a provision u...........

Indian Economic System(CSC) External Sector

Download Solution PDF

With reference to the Most Favoured Nation (MFN), consider the following statements

It is a provision under the General Agreement on Tariffs and Trade (GATT), 1994.
Under this, a country with MFN status will not be treated worse than any other nation.

Select the correct statement.

1 only

2 only

Both

None

छोटे Courses बड़े Results

Master External Sector

Prepare through Micro-courses

Try Now

Explanation:

World Trade Organisation (WTO) members commit to treating other members equally so they can all benefit from each other's lowest tariffs, highest import quotas and fewest trade barriers for goods and services.

This principle of non-discrimination is known as Most Favoured Nation (MFN) treatment.
This is one of the measures which ensures trade without discrimination. Another one is 'National Treatment '.
Article 1 of the General Agreement on Tariffs and Trade (GATT), 1994, requires every WTO member country to accord MFN status to all other member countries.
A nation with MFN status will not be discriminated against and will not be treated worse than any other nation with MFN status.
Grant someone a special favour (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members.

Hence both statements are correct.