In international economic relations and international politics, most favoured nation ( MFN ) is a status or level of treatment accorded by one state to another in international trade . The term means the country which is the recipient of this treatment must nominally receive equal trade advantages as the "most favoured nation" by the country granting such treatment (trade advantages include low tariffs or high import quotas ). In effect, a country that has been accorded MFN status may not be treated less advantageously than any other country with MFN status by the promising country.
49-507: MFN may refer to: MFN, acronym for Most favoured nation status in international relations MfN, acronym for Museum für Naturkunde , a natural history museum in Berlin, Germany MFN, the IATA code for Milford Sound Airport , New Zealand Metromedia Fiber Network, Inc., now known as AboveNet Multi-frequency network Music for Nations ,
98-523: A British record label "MFN", a song by Cibo Matto from their 2014 album Hotel Valentine Topics referred to by the same term [REDACTED] This disambiguation page lists articles associated with the title MFN . If an internal link led you here, you may wish to change the link to point directly to the intended article. Retrieved from " https://en.wikipedia.org/w/index.php?title=MFN&oldid=1003459979 " Category : Disambiguation pages Hidden categories: Short description
147-723: A bilateral level, however, the United States could not grant MFN status to some members of the former Soviet Union, including the Russian Federation , because of the Jackson–Vanik amendment . This presented an obstacle to those countries' accession to the WTO. At the urging of Vice President Joe Biden , the Jackson–Vanik amendment (which attempts to punish human rights violations without hampering trade) ceased to apply to
196-408: A certain number of conditions are met, one client may be entitled to the lowest fee offered to other clients with a substantially identical investment strategy and the same or lower level of assets under management. The most favoured nation clause can also be included in an agreement between a state and a company or an investor. This involves the provision of special privileges and advantages although
245-550: A key player in metals. There were already concerns that the UAE was a main recipient of majority of the smuggled gold from DRC. Lists Data on the value of exports and imports and their quantities often broken down by detailed lists of products are available in statistical collections on international trade published by the statistical services of intergovernmental and supranational organisations and national statistical institutes. The definitions and methodological concepts applied for
294-404: A mere prohibition to enact discriminatory legislation concerning duties on goods of like character imported from an MFN partner. The court ruled that MFN does not constrain the U.S. from giving out special privileges to other countries. The ideas behind MFN policies can first be seen in U.S. foreign policy during the opening of Japan in the mid to late 1850s, when they were included as a clause in
343-451: A multilateral reciprocal relationship the same privilege would be extended to the group that negotiated a particular privilege. The non-discriminatory component of GATT/WTO applies a reciprocally negotiated privilege to all members of GATT/WTO without respect to their status in negotiating the privilege. Most favoured nation status is given to an international trade partner to ensure non-discriminatory trade between all partner countries of
392-1191: A non-market economy, which had been originally suspended in 1951, was restored in 1980 and was continued in effect through subsequent annual Presidential extensions. Following the massacre of pro-democracy demonstrators in Tiananmen Square in 1989, however, the annual renewal of China's MFN status became a source of considerable debate in the Congress, and legislation was introduced to terminate China's MFN/NTR status or to impose additional conditions relating to improvements in China's actions on various trade and non-trade issues. Agricultural interests generally opposed attempts to block MFN/NTR renewal for China, contending that several billion dollars annually in current and future U.S. agricultural exports could be jeopardized if China retaliated. In China's case, Congress agreed to permanent normal trade relations (PNTR) status in Pub. L. 106–286 (text) (PDF) , which President Clinton signed into law on October 10, 2000. PNTR paved
441-555: A number of industries including most topically with online travel agents. However the regulatory tide in the EU appears to be turning against the use of these clauses. In a number of recent EU cases in the UK and Germany, MFNs have been condemned when used by companies with significant market power. Startups with most favoured nation (MFN) clause in agreements with their investors are called most favoured nation startups. The clause intends to protect
490-555: A significant share of gross domestic product (GDP). While international trade has existed throughout history (for example Uttarapatha , Silk Road , Amber Road , salt roads ), its economic, social, and political importance has been on the rise in recent centuries. Carrying out trade at an international level is a complex process when compared to domestic trade . When trade takes place between two or more states , factors like currency, government policies, economy, judicial system , laws, and markets influence trade. To ease and justify
539-879: A specific production, thereby increasing the advantages of specific trade over specific local production. Forms of local products that are highly localized may not be able to meet the efficiency of more large-scale, highly consolidated production in terms of efficiency, including environmental impact. A systematic, and possibly first large-scale, cross-sectoral analysis of water , energy and land in security in 189 countries that links total and sectorial consumption to sources showed that countries and sectors are highly exposed to over-exploited, insecure, and degraded such resources with economic globalization having decreased security of global supply chains . The 2020 study finds that most countries exhibit greater exposure to resource risks via international trade – mainly from remote production sources – and that diversifying trading partners
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#1732765677532588-448: A substitute for trade in factors of production. Instead of importing a factor of production, a country can import goods that make intensive use of that factor of production and thus embody it. An example of this is the import of labor-intensive goods by the United States from China . Instead of importing Chinese labor, the United States imports goods that were produced with Chinese labor. One report in 2010, suggested that international trade
637-417: Is a non-discriminatory trade policy as it ensures equal trading among all WTO member nations rather than exclusive trading privileges. The earliest form of the most favoured nation status can be found as early as the 11th century. Today's concept of the most favoured nation status starts to appear in the 18th century, when the division of conditional and unconditional most favoured nation status also began. In
686-453: Is also included in most bilateral investment treaties concluded between capital exporting and capital importing countries after World War II. Trade experts consider MFN clauses to have the following benefits: As MFN clauses promote non-discrimination among countries, they also tend to promote the objective of free trade in general. GATT members recognized in principle that the "most favoured nation" rule should be relaxed to accommodate
735-438: Is certain freedom-of-emigration requirements (better known as the Jackson–Vanik amendment ). The act authorizes the president to waive a country's full compliance with Jackson–Vanik under specified conditions, and this must be renewed by June 3 of each year. Once the president does so, the waiver is automatic unless Congress passes (and avoids or overturns a presidential veto of) a disapproval resolution. MFN/NTR status for China,
784-429: Is concerned, each member country has indicated the same services in its schedule of services commitments, as notified to the WTO. A most favoured nation clause (also called a most favoured customer clause or most favoured licensee clause ) is a contract provision in which a seller (or licensor) agrees to give the buyer (or licensee) the best terms it makes available to any other buyer (or licensee). In some contexts,
833-591: Is different from Wikidata All article disambiguation pages All disambiguation pages Most favoured nation There is a debate in legal circles whether MFN clauses in bilateral investment treaties include only substantive rules or also procedural protections. The members of the World Trade Organization (WTO) agree to accord MFN status to each other. Exceptions allow for preferential treatment of developing countries , regional free trade areas and customs unions . Together with
882-468: Is the third week of May. Every year the President declares that week to be World Trade Week. The trade-offs between local food production and distant food production are controversial with limited studies comparing environmental impact and scientists cautioning that regionally specific environmental impacts should be considered. A 2020 study indicated that local food crop production alone cannot meet
931-442: Is transferred or sold from a party in one country to a party in another country is an export from the originating country, and an import to the country receiving that product. Imports and exports are accounted for in a country's current account in the balance of payments . Trading globally may give consumers and countries the opportunity to be exposed to new markets and products. Almost every kind of product can be found in
980-483: Is unlikely to help countries and sectors to reduce these or to improve their resource self-sufficiency . A number of people in Africa , including children, were using informal or " artisanal " methods to produce gold . While millions were making a livelihood through the small-scale mining, governments of Ghana , Tanzania and Zambia complaint about the increase in illegal production and gold smuggling . Sometimes
1029-552: The 2019 Pulwama attack that killed over 40 CRPF personnel, India withdrew the MFN status that it had accorded to Pakistan. In March 2022, in response to the 2022 Russian invasion of Ukraine , the G7 countries resolved jointly to withdraw 'most favoured nation' status from Russia and to impose punitive tariffs . In a statement, the group declared that "Russia cannot grossly violate international law and expect to benefit from being part of
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#17327656775321078-755: The Commercial Treaty of 1858 , which signalled the opening of the Japanese market. Since 1998, the term normal trade relations (NTR) has replaced most favoured nation in all U.S. statutes. This change was included in section 5003 of the Internal Revenue Service Restructuring and Reform Act of 1998 (P.L. 105-206). However, Title IV of the Trade Act of 1974 (P.L. 93-618) established conditions on U.S. MFN/NTR tariff treatment to certain non-market economies, one of which
1127-491: The international market , for example: food, clothes, spare parts, oil, jewellery, wine, stocks, currencies, and water. Services are also traded, such as in tourism , banking , consulting , and transportation . Advanced technology (including transportation ), globalization , industrialization , outsourcing and multinational corporations have major impacts on the international trade systems . International trade is, in principle, not different from domestic trade as
1176-574: The Korean kingdom Joseon was compelled by the United States to give it most favored nation status. After World War II , tariff and trade agreements were negotiated simultaneously by all interested parties through the General Agreement on Tariffs and Trade (GATT), which ultimately resulted in the World Trade Organization in 1995. The WTO requires members to grant one another "most favoured nation" status. A "most favoured nation" clause
1225-524: The MFN standard." This general principle, however, is not absolute. The current EU competition law position is that MFN clauses will infringe Article 101(i) if in the individual circumstances of the case result in an appreciable adverse effect on competition in the European Union. This is likely to happen when the parties to the agreement have substantial market power. It is recognised by EU courts and regulators that such clauses are widely used in
1274-485: The Russian Federation and Moldova with Magnitsky Act on December 14, 2012. In 1998, the "most favoured nation status" in the United States was renamed "permanent normal trade relations" (NTR) as all but a handful of countries had this status already. The U.S. gives preferential treatment to some of its trading partners without this status, based on the U.S. Supreme Court interpretation of MFN principle as
1323-526: The UAE. In July 2020, a report by Swissaid highlighted that the Dubai-based precious metal refining firms, including Kaloti Jewellery International Group and Trust One Financial Services (T1FS), received most of their gold from poor African states like Sudan . The gold mines in Sudan were seldom under the militias involved in war crimes and human rights abuses . The Swissaid report also highlighted that
1372-453: The WTO. A country which provides MFN status to another country has to provide concessions, privileges, and immunity in trade agreements. It is the first clause in the GATT. Under rules of WTO, a member country is not allowed to discriminate between trade partners and if a special status is granted to one trade partner, the country is required to extend it to all members of WTO. In a nutshell, MFN
1421-627: The agreement or schedule notified to the WTO by that member country. Pursuant to that provision, India has extended MFN status for goods to most member countries of WTO. Within the South Asian Association for Regional Cooperation (SAARC), Bangladesh , Maldives , Nepal , Pakistan and Sri Lanka are members of the WTO and all excepting Pakistan have extended MFN status to India, which had extended MFN status to all SAARC countries. In 2019, India revoked its MFN status towards Pakistan . So far as exception to MFN status (if any)
1470-696: The chief global strategist of International Resources Holding (IRH), Sibtein Alibhai, from the UAE approached a number of gold traffickers in Democratic Republic of Congo. The firm is a unit of IHC, which is controlled by Sheikh Tahnoun bin Zayed. In 2023, IRH acquired Zambia’s Mopani copper-cobalt complex in exchange of a commitment to put in over $ 1 billion into the mine. It was also aggressively looking for mining deals, particularly in Africa, to turn into
1519-2081: The demand for most food crops with "current production and consumption patterns" and the locations of food production at the time of the study for 72–89% of the global population and 100–km radiuses as of early 2020. Studies found that food miles are a relatively minor factor of carbon emissions, albeit increased food localization may also enable additional, more significant, environmental benefits such as recycling of energy, water, and nutrients. For specific foods regional differences in harvest seasons may make it more environmentally friendly to import from distant regions than more local production and storage or local production in greenhouses. Qualitative differences between substitutive products of different production regions may exist due to different legal requirements and quality standards or different levels of controllability by local production- and governance -systems which may have aspects of security beyond resource security, environmental protection , product quality and product design and health . The process of transforming supply as well as labor rights may differ as well. Local production has been reported to increase local employment in many cases. A 2018 study claimed that international trade can increase local employment. A 2016 study found that local employment and total labor income in both manufacturing and nonmanufacturing were negatively affected by rising exposure to imports. Local production in high-income countries, rather than distant regions may require higher wages for workers. Higher wages incentivize automation which could allow for automated workers' time to be reallocated by society and its economic mechanisms or be converted into leisure-like time. Local production may require knowledge transfer , technology transfer and may not be able to compete in efficiency initially with specialized , established industries and businesses, or in consumer demand without policy measures such as eco-tariffs . Regional differences may cause specific regions to be more suitable for
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1568-646: The early days of international trade , "most favoured nation" status was usually used on a dual-party, state-to-state basis. A nation could enter into a "most favoured nation" treaty with another nation. In the Treaty of Madrid (1667) , Spain granted England "most favoured nation" trading status. With the Jay Treaty in 1794, the US also granted the same to Britain. In the Joseon–United States Treaty of 1882 ,
1617-475: The first investors, so the later investors do not get better terms than them. This device is promoted by American early stage accelerator, Y Combinator . [REDACTED] World portal International trade International trade is the exchange of capital , goods , and services across international borders or territories because there is a need or want of goods or services. (see: World economy ) In most countries, such trade represents
1666-852: The illicit gold coming into Dubai from Africa is imported in large quantities by the world's largest refinery in Switzerland , Valcambi . Another report in March 2022 revealed the contradiction between the lucrative gold trade of West African countries and the illicit dealings. Like Sudan , Democratic Republic of Congo (DRC), Ghana and other states, differences were recorded in the gold production in Mali and its trade with Dubai, UAE. The third largest gold exporter in Africa, Mali imposed taxes only on first 50kg gold exports per month, which allowed several small-scale miners to enjoy tax exemptions and smuggle gold worth millions. In 2014, Mali's gold production
1715-506: The international economic order". In the 1990s, continued "most favored nation" status for the People's Republic of China by the United States created controversy in the latter because of its sales of sensitive military technology and China's serious and continuous persecution of human rights . China's MFN status was made permanent on December 27, 2001. All of the former Soviet states , including Russia, were granted MFN status in 1996. On
1764-421: The legal system, and so on. Another difference between domestic and international trade is that factors of production such as capital and labor are often more mobile within a country than across countries. Thus, international trade is mostly restricted to trade in goods and services, and only to a lesser extent to trade in capital, labour, or other factors of production. Trade in goods and services can serve as
1813-409: The members while maintaining tariff walls between member nations and the rest of the world. Trade agreements usually allow for exceptions to allow for regional economic integration . WTO rules allow any country to revoke the MFN status that it had previously accorded to another: in particular, Article 21 (National Security) allows it to do so without further explanation. In February 2019, following
1862-629: The motivation and the behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border or not. However, in practical terms, carrying out trade at an international level is typically a more complex process than domestic trade. The main difference is that international trade is typically more costly than domestic trade. This is due to the fact that cross-border trade typically incurs additional costs such as explicit tariffs as well as explicit or implicit non-tariff barriers such as time costs (due to border delays), language and cultural differences, product safety,
1911-645: The needs of developing countries , and the UN Conference on Trade and Development (established in 1964) has sought to extend preferential treatment to the exports of the developing countries. Another exception to the "most favoured nation" principle has been posed by regional trade blocs such as the European Union and the North American Free Trade Agreement (NAFTA), which have lowered or eliminated tariffs among
1960-682: The pattern of trade. The following table is a list of the 25 largest trading states according to the World Trade Organization in 2021 and 2022. Source: International Trade Centre In the US, the various U.S. Presidents have held observances to promote big and small companies to be more involved with the export and import of goods and services. President George W. Bush observed World Trade Week on May 18, 2001, and May 17, 2002. On May 13, 2016, President Barack Obama proclaimed May 15 through May 21, 2016, World Trade Week, 2016. On May 19, 2017, President Donald Trump proclaimed May 21 through May 27, 2017, World Trade Week, 2017. World Trade Week
2009-445: The principle of national treatment , MFN is one of the cornerstones of WTO trade law . "Most favoured nation" relationships extend reciprocal bilateral relationships following both the General Agreement on Tariffs and Trade (GATT) and WTO norms of reciprocity and non-discrimination. In bilateral reciprocal relationships a particular privilege granted by one party only extends to other parties who reciprocate that privilege, while in
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2058-470: The procedure involved criminal operations and even human and environmental cost. Investigative reports based on Africa's export data revealed that gold in large quantities is smuggled out of the country through the United Arab Emirates , without any taxes being paid to the producing states. Analysis also reflected discrepancies in the amount exported from Africa and the total gold imported into
2107-453: The process of trade between countries of different economic standing in the modern era, some international economic organizations were formed, such as the World Trade Organization . These organizations work towards the facilitation and growth of international trade. Statistical services of intergovernmental and supranational organizations and governmental statistical agencies publish official statistics on international trade. A product that
2156-557: The state cannot use contractual mechanisms to avoid its MFN treatment obligations with other countries. Unlike the relationship among states where a nation accorded an MFN status cannot be treated less advantageously than another, the host nation does not breach MFN treatment if it provides different privileges to different investors. The United Nations Conference on Trade and Development clarified this when it stated that "a host country cannot be obliged to enter into an individual investment contract" and that "freedom of contract prevails over
2205-448: The use of such clauses may become commonplace, such as when online ebook retailers contract with publishers for the supply of e-books. Use of such clauses, in some contexts, may provoke concerns about anticompetitive influences and antitrust violations, while in other contexts, the influence may be viewed as procompetitive. One example where most favoured nation clauses may appear is in institutional investment advisory contracts, where if
2254-501: The way for China's accession to the WTO in December 2001, which provides U.S. exporters of agricultural products the opportunity to benefit from China's WTO agreements to reduce trade barriers and open its agricultural markets. As per the obligation under their World Trade Organization (WTO) treaties of accession, the member countries of WTO automatically extend most favoured nation (MFN) status to each other unless otherwise specified in
2303-545: Was exported from Africa, and the UAE accounted for 93% of the undeclared exports. Following the Emirates, next two prime importers were Switzerland and India. Majority of the artisanal gold extracted in the 18 African countries ends up in the Emirates. As per Swiss regulations, gold’s place of origin is usually where it is last refined, because of which smuggled gold linked to conflicts and human rights violations legally enters Switzerland. A United Nations report revealed that
2352-403: Was increased when a country hosted a network of immigrants, but the trade effect was weakened when the immigrants became assimilated into their new country. The history of international trade chronicles notable events that have affected trading among various economies. There are several models that seek to explain the factors behind international trade, the welfare consequences of trade and
2401-404: Was of 45.8 tonnes, while the UAE's gold import were at 59.9 tonnes. In May 2024, a report released by Swissaid revealed that the prime recipient of tens of billions of dollars of smuggled African gold each year had been the UAE. Between the 2012 and 2022, 2596 tonnes of gold undeclared was exported out of Africa to the UAE. In 2022 alone, 435 tonnes (worth about $ 31 billion) of gold not declared
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