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International Trade vocabulary · Trade Agreements and Policy

Most-favoured nation

Meaning in international trade, with examples

nounAdvanced term

In international trade, most-favoured nation means: A WTO principle that a country must give all other members the same tariff and trade treatment it gives to its most favoured trading partner.

In Turkish: en çok kayrılan ülke, MFN

How it is used

Shortened to MFN. The 'MFN rate' is the normal duty rate a country charges WTO members when no preference applies. Free trade agreements and customs unions are allowed exceptions. US spelling: most-favored nation.

Example sentences

  1. Without an EUR.1, the goods pay the most-favoured nation rate of 8 percent.

  2. Most-favoured nation treatment means equal treatment, not special treatment.

Common collocations

  • most-favoured nation rate
  • MFN treatment
  • MFN tariff
  • most-favoured nation principle
  • WTOWorld Trade Organization: the international organization based in Geneva that sets the rules for trade between its member countries and helps settle trade disputes.
  • preferential tariffA lower customs duty rate, sometimes zero, given to goods from certain countries under a trade agreement or a development programme.
  • tariffA tax charged by a government on imported goods, usually as a percentage of their value; also the official list of these rates.
  • free trade agreementAn agreement between two or more countries to remove or reduce customs duties and other barriers on most of the goods traded between them.

More terms: Trade Agreements and Policy

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