MFN - a term that in international economic relations determines the status of a country that enjoys reduced tariffs and reducing trade barriers.He was awarded two (or more) countries with trade agreements.
For all WTO Members receive this status.This means that they have the same commercial advantages.This is extremely important for small countries participating in trade agreements, because it gives the right to reduce the value of exports, making them competitive.The country that received the MFN status, can not be regarded as less useful than any other developed (with status), which has a promising economy.Thus, the most favored increases exports and economic development of the state.Exceptions to take account of the preferential treatment of developing countries, regional free trade areas and customs unions.
MFN disadvantage is that some countries can not protect their industrial sectors from cheaper goods produced by foreign partners.This problem is particularly exciting.For example, when some state have to export cheap food to the US market, it is, in fact, lose its agriculture, as local farmers can not compete with subsidized food products in the US and the EU.They are forced to move to cities in search of work.However, traders increase prices, which leads to food riots.
In any case, national treatment and most favored nation treatment are the main principles of WTO trade law.The first refers to the fact that foreign companies in the countries of trading partners have an equal position with the locals.
status Historical roots can be found in the eleventh century.But in its present form, it began to appear in the eighteenth century.In the early years of the development of international trade, it was used between the two countries.In 1794, "Jay Treaty" the United States has provided the UK's trade status.
In the late 19th - early 20th centuries in connection with the situation when a strong Western Empire MFN actually was imposed forcibly Asian countries, it was seen as predatory policy tool.One striking example of such unequal relations aimed at looting the economy of weaker states is the Treaty of Nanking (1842) between the Qing Empire (China) and the United Kingdom, concluded after the First Opium War, in which Britain received the Hong Kong Island.
in Korean history textbook says that a trade agreement with the United States in 1882 - an unequal agreement that allowed the US to gain an unfair privileges of the Joseon Dynasty.However, many people consider the most favored both friendly countries with weak economies, giving the opportunity to defend their interests.It is likely that they are right.As you know, superpowers in the past, if desired, would not be difficult to destroy completely the economy of the weaker countries, regardless of whether they have status or not.
After World War II, trade agreements were signed simultaneously between many countries through the General Agreement on Tariffs and Trade, which led eventually in 1994 to the WTO.
WTO Agreement - are very complex, confirmed by legal documents, covering a wide range of activities.They concern the agriculture, textile industry, banking, telecommunications, government purchases, industrial standards, product safety, food hygiene, intellectual property, and more.The main principle is that the WTO requires members to provide each other the most favored . trade experts believe that many of the items NLR have great advantages, and tends to promote trade relations without discrimination and free trade in general.
