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MOST FAVORED NATION (MFN) Definition & Legal Meaning

Definition & Citations:

Non-discriminatory trade policy commitment offered reciprocally offered between two countries. Both countries set the lowest import duty and quota restrictions on each other’s imports as they do on similar imports from any other country. Under the General Agreement On Tariffs And Trade (GATT) and its successor, the World Trade Organization (WTO), Article 1 states that all signatory states must extend this treatment to each other. However, free trade areas, common markets, and customs unions are exempt from MFN provisions.


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