Regarding the Most Favoured Nation MFN principle of World Trade Organisation WTO Which of the follow...........

Economic Affairs World Trade Organsiation (WTO)

Regarding the Most Favoured Nation (MFN) principle of World Trade Organisation (WTO) , Which of the following statements is/are correct ?

1. According to the MFN principle, each of the WTO member countries should “treat all the other members equally as ‘most- favoured’ trading partners.”

2. MFN status entails special treatment for some nations, where the granting nation has a trade advantage.

3. India accorded MFN status to Pakistan in 1996 as per India’s commitments as a WTO member.

Select the correct answer using the code given below.

1 and 2 only

1 and 3 only

2 only

1, 2 and 3

छोटे Courses बड़े Results

Master World Trade Organsiation (WTO)

Prepare through Micro-courses

Try Now

Explanation:

According to the MFN principle of the WTO’s General Agreement on Tariffs and Trade (GATT) — to which India is a signatory/contracting party — each of the WTO member countries should “treat all the other members equally as ‘most-favoured’ trading partners.” The WTO says, "Grant someone a special favour (such as a lower customs duty rate) and you have to do the same for all other WTO members." Hence, though MFN sounds like special treatment, in effect it means non-discrimination. The MFN status was accorded to Pakistan in 1996 as per India’s commitments as a WTO member. But Pakistan has not reciprocated, reportedly citing “non-tariff barriers” erected by India as well as huge trade imbalance. According to the WTO’s report on the Trade Policy Review of Pakistan (in 2015), “Pakistan is in the process of offering India Non-Discriminatory Market Access" (similar to MFN).