Most Favoured Nation

FTA / RoO

WTO principle requiring tariff concessions to one WTO member to be extended to all WTO members unless FTA exception applies.

Sources

1. World Trade Organization — Principles of the trading system wto.org accessed 17 September 2026

The WTO puts the rule in plain terms: “countries cannot normally discriminate between their trading partners. Grant someone a special favour (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members.” The exceptions are what make the trading system look the way it does. Members “can set up a free trade agreement that applies only to goods traded within the group discriminating against goods from outside”; “they can give developing countries special access to their markets”; and “a country can raise barriers against products that are considered to be traded unfairly from specific countries”. Those three carve-outs are, respectively, every FTA, every GSP scheme, and every anti-dumping order — so in practice MFN is the rate that applies when none of the exceptions does.

These words are the WTO’s own explanatory text, not the agreement itself: the treaty PDFs on wto.org are closed to automated retrieval, so nothing here is presented as a quotation from a treaty article.

Related terms

• Absorption Principle
• Bilateral Cumulation
• Certificate of Origin
• Change in Tariff Classification
• Cumulation
• Diagonal Cumulation

From the AJG lexicon archive (July 2026).