Under WTO rules a member country cannot discriminate between its trade partners Hence A country cann...........

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Under WTO rules, a member country cannot discriminate between its trade partners. Hence

A country cannot enter into a free trade agreement with another country without the authorization of WTO
If a special status is granted to a trade partner, it should usually be extended to all members of the WTO.

Which of the above is/are correct?

1 only

2 only

Both 1 and 2

None

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Explanation:

Statement 1: Countries don’t require the permission of WTO for their trade related activities. However, they can move WTO if a country violates the rules of trade set by WTO. They are free to enter into FTAs with other countries.

Statement 2: This is called as MFN status. As per a WTO rule, every member of WTO requires to accord this status to other member countries. India has already granted this status to all WTO members including Pakistan. Pakistan is yet to reciprocate. Most Favoured Nation is a treatment accorded to a trade partner to ensure non- discriminatory trade between two countries vis-a-vis other trade partners. MFN, however, allows for countries to enter into regional trade agreements. It also relaxes such requirements in case of LDCs and other developing countries.