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Economic and Legal Aspects of the Most Favoured Nation Clause

  • Horn, Henrik
  • Mavroidis, Petros C

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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