Non-Discrimination

Two non-discrimination principles underlie the World Trade Organization Agreement, as well as many regional trade agreements. The "Most Favored Nation" clause (MFN) essentially requires that equal treatment be afforded to all imported goods, irrespective of their origin, as long as they are "like". The other non-discrimination principle, the "National Treatment" obligation (NT), requests importing countries to treat imported goods no less favorably than domestically produced "like" products. This note presents some basic law and economics of these provisions.