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Under the WTO agreements, countries cannot normally discriminate between their trading partners – a treatment which is known as “Most favoured Nation (MFN)” status. However some discrimination is allowed when
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1 and 2 only
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Exceptions to MFN principle: For example, countries can set up a free trade agreement that applies only to goods traded within the group — discriminating against goods from outside, for e.g. SAFTA or TPP. Or they can give developing countries special access to their markets, for e.g. agricultural markets. Or a country can raise barriers against products that are considered to be traded unfairly from specific countries, for e.g. guns and ammunition. And in services, countries are allowed, in limited circumstances, to discriminate, as under TRIMS. But the agreements only permit these exceptions under strict conditions. In general, MFN means that every time a country lowers a trade barrier or opens up a market, it has to do so for the same goods or services from all its trading partners — whether rich or poor, weak or strong.
By: Pradeep Kumar ProfileResourcesReport error
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