Most Favoured Nation (MFN)
- clause in WTO’s General Agreement on Tariffs and Trade (GATT)
- is intended to ensure that member countries of the organization do not discriminate between their trade partners
-WTO member nation usually grants MFN status to all other members
-primary condition under MFN is that a country must charge the same tariff rate on imports irrespective of their origin.
-India granted MFN status to Pakistan in 1996, but it was not reciprocated by the latter.
-India withdrew MFN from Pakistan, in 2019 after terrorist attack in Pulwama J&K.
WTO & China’s Market Economy Status
-China became a member of the World Trade Organization (WTO) on 11 December 2001, on the condition that it will be treated as a non-market economy by other member countries for anti-dumping proceedings
-A non-market economy refers to a country which has a complete or substantially complete monopoly of its trade and where all domestic prices are fixed by the state.
-While the 15-year period ended in December 2016, the EU & US have desisted from granting market economy status to China, citing wide-ranging price control on export commodities by China.
-market economy status that would have legally insulated it from higher tariffs being imposed by other countries.
-In June 2020, China has lost a dispute to the European Union at WTO for market economy status as former allowed dispute to lapse
-After the latest development, to protect their industries, the EU and US will be able to apply high anti-dumping tariffs on goods from China.
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