Most Favoured Nation Principle

... Most Favoured Nation Principle Any advantage granted to the product of one country must be granted to he others. Decline of the mercantilist principle trade is a matter of one nation winning over the others replaced by principle that trade leads to comparative advantage which benefit nations. Advantages: 1. Efficient - Most efficient produces 2. world trading system more secure 3. simplifies protection 4. constitutional protection against special interest groups within country. 5. Access for new entrants. Disadvantages: Undermined by various exceptions, does not mean is useless simply less efficient. 1. Developing countries exception - GSP system (some systems of GSP are under challenge from India. 2. Free Trade exception Art. 24. 3. Art. 19 Agreement on safeguards, 4. art 6 Antidumping and subsidies. 5. Balance of payment Arts 12 ff. 6. Internal security art 21. 7. Retaliation (not on MFN basis) Includes Customs duties , rules, regulations, taxation, methods of valuation. All of these are subject to MFN. What is a "like product" in the context of Art.

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