Q33. With reference to principles of multilateral trading system by WTO, consider the following statements:
1. Principle of "Most-favoured-nation (MFN)" means that a member country is allowed to extend a special favour to its trading partner without extending it to the other members of WTO.
2. Principle of "national treatment" means Imported and locally-produced goods should be treated equally.
3. Charging customs duty on an import is a violation of national treatment.
Which of the above statement(s) is/are correct?
Q33. With reference to principles of multilateral trading system by WTO, consider the following statements:
1. Principle of "Most-favoured-nation (MFN)" means that a member country is allowed to extend a special favour to its trading partner without extending it to the other members of WTO.
2. Principle of "national treatment" means Imported and locally-produced goods should be treated equally.
3. Charging customs duty on an import is a violation of national treatment.
Which of the above statement(s) is/are correct?
The correct option is B (b) Only 2
Most-favoured-Nation (MFN): Although this sounds like a contradiction.
It suggests special treatment, but in the WTO it actually means non-discrimination - treating virtually everyone equally.
Under the WTO agreements, countries cannot normally discriminate between their trading partners.
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.
National Treatment: It is a principle which requires that imported and locally-produced goods should be treated equally.
National treatment only applies once a product has entered the market.
Therefore, charging customs duty on an import is not a violation of national treatment.
(b) Only 2
Most-favoured-Nation (MFN): Although this sounds like a contradiction.
It suggests special treatment, but in the WTO it actually means non-discrimination - treating virtually everyone equally.
Under the WTO agreements, countries cannot normally discriminate between their trading partners.
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.
National Treatment: It is a principle which requires that imported and locally-produced goods should be treated equally.
National treatment only applies once a product has entered the market.
Therefore, charging customs duty on an import is not a violation of national treatment.
