CONSEQUENCES OF ‘MOST FAVOURED NATION’ PRINCIPLE IN INTERNATIONAL TRADE

Abstract

:  MFN principle, together with national treatment, is cornerstone of smooth and transparent international trade under auspices of WTO agreements. It has brought all member-States at equal footing pertaining to trade in goods, services and intellectual properties. It has declined protectionist and discriminatory measures of member-States. Nevertheless, it has recognized several exceptional conditions to permit member-States to establish protectionist and discriminatory measures. In this research paper, incorporation of MFN principle in WTO agreements, including GATT, GATS and TRIPS, and exceptions thereto, alongwith settled trade disputes, has been analyzed. Relevance of exceptions to MFN principle in the modern globalized economy has also been inquired. This research paper is divided into five sections. Section I is introduction; provisions related to MFN principle has been dealt in section II; section III examines the permissible exceptions to the States to decline from the MFN principle; settled disputes have been examined in section IV; and section V is summation.