MFN Rule stands for Most Favoured Nation Rule; what does it require?

MFN Rule stands for Most Favoured Nation Rule; what does it require?

• A. If one member gets a special trade deal, only that member receives the deal
• B. If one member gets a special trade deal, some members receive the same deal
• C. If one member gets a special trade deal, all WTO members must receive the same deal
• D. Deals are kept confidential

Answer: (C)

The main idea being tested is nondiscrimination in trade. The MFN rule means that when a country grants a trade concession to one WTO member, it must extend the same concession to all other WTO members on the same terms. This keeps trade fair by preventing special deals for a single country or a subset of members. So, the rule requires that all WTO members receive the same deal. Why this is the best answer: it captures the essence of MFN—that benefits given to one member are automatically available to all members. If a country lowers tariffs or offers better access to one partner, those same terms must apply to everyone else in the WTO. Why the other ideas don’t fit: giving the benefit only to that one member would violate nondiscrimination; offering it to some members would also breach MFN; keeping deals confidential isn’t part of MFN, which is about equal, transparent treatment for all members. For a quick concrete picture: if Country A reduces tariffs on a product for Country B, that same reduced tariff must be available to all WTO members.

The main idea being tested is nondiscrimination in trade. The MFN rule means that when a country grants a trade concession to one WTO member, it must extend the same concession to all other WTO members on the same terms. This keeps trade fair by preventing special deals for a single country or a subset of members. So, the rule requires that all WTO members receive the same deal.

Why this is the best answer: it captures the essence of MFN—that benefits given to one member are automatically available to all members. If a country lowers tariffs or offers better access to one partner, those same terms must apply to everyone else in the WTO.

Why the other ideas don’t fit: giving the benefit only to that one member would violate nondiscrimination; offering it to some members would also breach MFN; keeping deals confidential isn’t part of MFN, which is about equal, transparent treatment for all members.

For a quick concrete picture: if Country A reduces tariffs on a product for Country B, that same reduced tariff must be available to all WTO members.