What is MOST FAVORED NATION (MFN)?

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.

More On This Topic



Link to This Definition
Did you find this definition of MOST FAVORED NATION (MFN) helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary