Question

"If any country provides trade relaxations to one of its trading partners, then all trading partners of that country would be eligible for or should be provided with the same trade relaxations"

The above statement describes conditionalities corresponding to

• A. National Treatment
• B. Most Favoured Nation
• C. Multilateral agreements
• D. Generalised system of preferences

Answer 1

The correct option is B Most Favoured Nation

<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> Most Favoured Nation treatment is a non-discriminatory trade policy as it ensures equal trading among all WTO member nations rather than exclusive trading privileges.

Although it sounds as if MFN offers preferential treatment, it only ensures non-discriminatory trade. It makes sure that any country receiving MFN status avoids any disadvantageous situation in comparison to the granter's other trade partners.

According to the World Trade Organisation rules, countries cannot normally discriminate between their trading partners. If one country is granted a trade concession such as, for example, lower import duties, then all WTO members must be extended the same concessions.