The Future of MFN (Most Favourable Nation) Treatment under the Law of World Trade Organization

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ACKNOWLEDGEMENT

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ABSTRACT

International trade law has been predominantly comprised of multilateral agreements acceded to by the WTO member states. These all-encompassing agreements are then added to and supported by formal trade negotiation rounds. In the modern era of international trade, international institutions such as the World Trade Organization (WTO) have encouraged liberalism at the multilateral level, at the same time as having regard to the national sovereignty of individual states. The ultimate objective of the WTO was established as free-trade between nations, and this was viewed as best being achieved through multilateral agreements which would apply to all WTO members. Multilateral agreements are trade agreements between all WTO member countries that are required to satisfy the most favoured nation (MFN) principle, requiring market access benefits to be made on a non-discriminatory basis. Regional and bilateral agreements comprise trade agreements in which a number or group of countries form preferential trade agreements that give a discriminatory concessions to member countries. For the purpose of this paper, regional trade agreements (RTAs) will refer to all forms of interstate cooperation falling under GATT Article XXIV, including bilateral, preferential trade and free-trade agreements. Hence, RTAs constitute an exception to the MFN principle. This research will discuss in detail, the background for MFN provisions, their establishment and developments over time and their effects in the context of international relations and trade. We will analyze that MFN provisions provide a sound framework for the promulgation of international trade and are subjected to greater improvements over time.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

ABSTRACTIV

CHAPTER 01: INTRODUCTION1

Theoretical Framework3

Argument4

Research Questions5

Aims and Objectives5

Significance of the Study6

CHAPTER 02 (A): BACKGROUND OF MFN7

MFN Clause, Origin and Examples8

Philosophy of MFN Principle11

CHAPTER 02 (B): DEVELOPING AND REFINING MFN TREATMENT14

How it is developed?14

How it is refined?16

CHAPTER 03: METHODOLOGY19

Informed Consent19

Confidentiality19

Validity20

Ethical Consideration21

CHAPTER 04: CURRENT STATUS OF MFN22

GATT (General Agreement on Trade and Tariff)26

The DOHA, Tokyo and Uruguay Rounds28

Uruguay Round29

Doha Round29

The crisis of the GATT and the Uruguay Round32

CHAPTER 05: MFN RULES33

Advantages and Disadvantages34

CHAPTER 06: WORLD TRADE ORGANIZATION37

Single contract (undertaking)39

Transparency39

Performance40

Cases40

Belgium Family Allowance40

EC-Tariff Preferences41

Indonesia Autos42

Case of India42

US-MFN Footwear43

EC-Bananas44

EC-commercial Vessels45

Japan - Alcoholic Beverage45

Canada-Aircraft45

EEC-Import of beef46

Spain-Unroasted Coffee46

US-Singapore FTA47

Canada-Chile FTA47

What WTO and Members can do?48

National treatment: Treating Locals and Foreigners With Similarity49

Contributing Factors of WTO and Members to Grow MFN Rules50

CHAPTER 07: FUTURE OF MFN56

CHAPTER 08: CONCLUSION59

CHAPTER 09: RECOMMENDATIONS60

REFERENCES62

CHAPTER 01: INTRODUCTION

Most Favoured Nation (MFN) is a part of a treaty under the World Trade Organization (WTO) in which ...