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Economic and Legal Aspects of the Most Favoured Nation Clause

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Author Info
Horn, Henrik
Mavroidis, Petros C

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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.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2859.

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Date of creation: Jun 2001
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Handle: RePEc:cpr:ceprdp:2859

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Related research
Keywords: Most-favoured-nation clause; non-discrimination in trade;

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Find related papers by JEL classification:
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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  22. Choi, Jay Pil, 1995. "Optimal tariffs and the choice of technology Discriminatory tariffs vs. the 'Most Favored Nation' clause," Journal of International Economics, Elsevier, vol. 38(1-2), pages 143-160, February. [Downloadable!] (restricted)
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  23. To, Ted, 1998. "Dynamics and Discriminatory Import Policy," CSGR Working papers series 07/98, Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick.
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  34. Winters, L. Alan, 1996. "Regionalism versus multilateralism," Policy Research Working Paper Series 1687, The World Bank. [Downloadable!]
  35. McCalman, Phillip, 2002. "Multi-lateral trade negotiations and the Most Favored Nation clause," Journal of International Economics, Elsevier, vol. 57(1), pages 151-176, June. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Kyle Bagwell & Robert W. Staiger, 2002. "Multilateral trade negotiations, bilateral opportunism and the rules of GATT/WTO," Discussion Papers 0102-37, Columbia University, Department of Economics. [Downloadable!]
    Other versions:
  2. Kyle Bagwell & Robert W. Staiger, 2004. "Backward stealing and forward manipulation in the WTO," Discussion Papers 0405-06, Columbia University, Department of Economics. [Downloadable!]
    Other versions:
  3. Nuno Limão, 2002. "Are Preferential Trade Agreements with Non-trade Objectives a Stumbling Bloc for Multilateral Liberalization?," International Trade 0206001, EconWPA. [Downloadable!]
    Other versions:
  4. repec:att:wimass:192049 is not listed on IDEAS
  5. Hillman, Arye L., 2003. "Trade Liberalization and Globalization: A Survey," CEPR Discussion Papers 3845, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  6. Chad Bown & Meredith Crowley, 2003. "Trade deflection and trade depression," Working Paper Series WP-03-26, Federal Reserve Bank of Chicago. [Downloadable!]
    Other versions:
  7. Edwin L.-C. Lai, 2008. "The most-favored nation rule in club enlargement negotiation," Working Papers 0815, Federal Reserve Bank of Dallas. [Downloadable!]
  8. Ludema, Rodney D & Mayda, Anna Maria, 2005. "Do Countries Free Ride on MFN?," CEPR Discussion Papers 5160, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  9. Cebi, Pinar & Ludema, Rodney, 2002. "The Rise and Fall of the Most-Favored-Nation Clause," Working Papers 15853, United States International Trade Commission, Office of Economics. [Downloadable!]
  10. Kyle Bagwell & Robert W. Staiger, 2000. "GATT-Think," NBER Working Papers 8005, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
    • Kyle Bagwell & Robert W. Staiger, 2002. "GATT-think," Discussion Papers 0102-39, Columbia University, Department of Economics. [Downloadable!]
  11. Joseph Francois & Ian Wooton, 2008. "Market Structure and Market Access," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  12. Fritz Breuss, 2004. "WTO Dispute Settlement: An Economic Analysis of four EU-US Mini Trade Wars," WIFO Working Papers 231, WIFO. [Downloadable!]
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