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Economic and Legal Aspects of the Most Favoured Nation Clause

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  • Horn, Henrik
  • Mavroidis, Petros C.

Abstract

The Most-Favored Nation clause (MFN) forbids Members of a trade agreement to discriminate between trading partners. It is typically seen as one of the main features of the multilateral trading system, and appears in several of the agreements in the World Trade Organization. There seems to be a rather widespread belief among policy makers that there are strong economic rationales for the MFN provision. The purpose of the Paper is to survey economic theory that may shed light on whether this view is well founded or not, and to summarise salient features of the case law as it concerns MFN.

Suggested Citation

  • Horn, Henrik & Mavroidis, Petros C., 2001. "Economic and Legal Aspects of the Most Favoured Nation Clause," CEPR Discussion Papers 2859, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:2859
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    More about this item

    Keywords

    Most-favoured-nation clause; Non-discrimination in trade;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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