The principle of most favourved nation in WTO regime is based on the following:Group of answer choicesNo answer text provided.Consistency in terms of tariff across commoditiesdifferential treatment among domestic and foreign companiesnon discrimination between countries
Question
The principle of most favourved nation in WTO regime is based on the following:Group of answer choicesNo answer text provided.Consistency in terms of tariff across commoditiesdifferential treatment among domestic and foreign companiesnon discrimination between countries
Solution
The principle of the most favored nation (MFN) in the World Trade Organization (WTO) regime is based on non-discrimination between countries. This principle means that each member of the WTO must apply the same trade advantages, like lower tariffs, to all other members. If a country improves the benefits that it gives to one trading partner, it has to give the same "best" treatment to all the other WTO members so that they all remain "most-favored". This principle is so important that it is the first article of the General Agreement on Tariffs and Trade (GATT), which governs trade in goods. MFN is also a priority in the General Agreement on Trade in Services (GATS) (Article 2) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) (Article 4), although in each agreement the principle is handled slightly differently. Therefore, the principle of the most favored nation under the WTO regime is not based on consistency in terms of tariffs across commodities or differential treatment among domestic and foreign companies.
Similar Questions
What is the most-favored nation principle? How do regional trade agreements violate the most-favored nation principle of the GATT/WTO?
A country that joins the WTO is required to increase its international trade with other member countriesGroup of answer choicesTrueFalse
The WTO promotes free trade between member countries. However, some developing nations argue that free trade can hinder their domestic industries. How can the WTO address this concern while still promoting its core principles?Group of answer choicesFocus solely on eliminating trade barriers between developed nations.Provide resources and technical assistance to developing countries to strengthen their industries.Impose stricter tariffs on developed nations.Create a tiered system with different trade rules for developing countries.
What is the underlying characteristic of the WTO?Group of answer choicesIt resolves disputes between economic trade blocksIt acts as an umbrella institution that regulates the agreements concluded at the Uruguay round, the organisation’s ultimate goal being the promotion of free international tradeIt facilitates economic co-operation between different countriesIt facilitates the development of less developed countriesNext
3. The optimum tariff isA) the best tariff a country can obtain via a WTO negotiated round of compromises.B) the tariff, which maximizes the terms of trade gains.C) the tariff, which maximizes the difference between terms of trade gains and terms of tradeloses.D) not practical for a small country due to the likelihood of retaliation.E) not practical for a large country due to the likelihood of retaliation.
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