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Most favoured nation (MFN) status provides that for all countries that are members of the World Trade Organization (WTO), all foreign suppliers should be treated equally and without discrimination in respect of all tariffs and other charges and the rules and formalities connected with imports and exports. In effect, MFN says that within the WTO, a member country cannot have any favorite countries for which it cuts a special trade deal.

Alternatively, a member country cannot punish another member country by giving it a worse trade deal. The basic premise is that a member country cannot treat any one member less favorably than any other member on the conditions of goods or services entering its country. MFN ensures that each member country is afforded the same ...

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