Q.Explain the principle of 'Most Favoured Nation' (MFN) treatment under the WTO.

One of the WTO's foundational rules prevents members from playing favourites in trade concessions. …

Most Favoured Nation (MFN) treatment is one of the core non-discrimination principles of the WTO trading system. It requires that if a member country grants a particular trade advantage — for example, a lower import tariff on a product — to any one trading partner, it must extend that same advantage to all other WTO members, without discrimination.

The underlying idea is to prevent countries from using preferential bilateral deals to fragment the trading system into a patchwork of unequal arrangements, and instead to keep trade access as broadly equal as possible across the whole membership. There are limited, clearly defined exceptions — for instance, members of a genuine regional free-trade area or customs union may extend deeper preferences to each other without violating MFN, and special and differential treatment is permitted for developing countries. …

Confusing MFN (which governs treatment BETWEEN different trading partners at the border) with National Treatment (which governs treatment of imported goods AFTER entry, relative to d …