Most Favoured Nation (MFN) Tariffs |
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The Most Favoured Nation principle is one of the key principles of the global trading system under the World Trade Organization. Under this principle countries are not allowed to discriminate between their trading partners (see link for further details on MFN: https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm).
Most Favourite Nation tariffs are set by each country for each product in the HS classification. They are applicable to all trading partners . In the absence of any trade agreement, the MFN tariffs are the base rate of customs duties applicable to imports from other countries.
During the process of negotiating a trade agreement countries lower their MFN tariffs for members of the agreement (on a reciprocal or unilateral basis depending on the type of agreement). Preferential tariffs negotiated under different trade agreements are an exception from the MFN tariffs.
More Glossary |
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