Most Favored Nation Status

The most favored nation (MFN) status is a level of status given by one country to another and enforced by the World Trade Organization (WTO). A country grants this clause to another nation if it is interested in increasing trade with that country. Countries achieving the MFN status are given specific trade advantages such as reduced tariffs on imported goods or high import quotas and the fewest trade barriers. MFN is one of the cornerstones of WTO trade law.

The MFN clause in the two countries’ free trade agreements confers that status. It means that the country that is the recipient of this treatment must nominally receive equal trade advantages as the MFN by the country granting such treatment. That clause is also used in loan ...