When did China become a most-favored-nation?

In the 1990s, continued “most favoured nation” status for the People’s Republic of China by the United States created controversy because of its sales of sensitive military technology and China’s serious and continuous persecution of human rights. China’s MFN status was made permanent on December 27, 2001.

What is meant by MFN?

A most-favored-nation (MFN) clause requires a country to provide any concessions, privileges, or immunities granted to one nation in a trade agreement to all other World Trade Organization member countries. Although its name implies favoritism toward another nation, it denotes the equal treatment of all countries.

What does it mean for a foreign nation to be granted most favored nation normal trade relations status by the United States?

In the United States, the name was changed from most favored nation (MFN) to PNTR in 1998. In international trade, MFN status (or treatment) is awarded by one nation to another. It means that the receiving nation will be granted all trade advantages, such as low tariffs, that any other nation also receives.

What is the concept of most favored nation?

The most favoured nation (MFN) principle is based on the idea that countries should treat all their trade partners equally—that no one country should be “more favoured.” It means no country should give special treatment to goods or services coming from one particular trading partner.

What are the reasons for a favored nation status for a particular country?

The most-favored-nation clause increases trade creation and decreases trade diversion, essentially encouraging more free trade between countries. It allows more efficient outcomes since the lowest cost producers can export goods to areas with the highest demand without government intervention.

Which country was the first to enjoy most-favored-nation trading status with the United States?

Almost all U.S. trading partners enjoy MFN status, which simply means a country’s products, when exported to America, are entitled to U.S. tariffs as low as any other nation’s. China was first awarded MFN in 1979, during the Jimmy Carter Administration.

Why is the MFN principle important?

Most-favoured-nation (MFN): treating other people equally Under the WTO agreements, countries cannot normally discriminate between their trading partners. It is so important that it is the first article of the General Agreement on Tariffs and Trade (GATT), which governs trade in goods.

What is the most-favored-nation status?

Most-favored-nation (MFN) status is an economic position in which a country enjoys the best trade terms given by its trading partner. That means it receives the lowest tariffs, the fewest trade barriers, and the highest import quotas (or none at all). In other words, all MFN trade partners must be treated equally.

What is the most-favored-nation principle?

“Most-Favoured-Nation” (“MFN”) treatment — requires Members to accord the most favourable tariff and regulatory treatment given to the pro- duct of any one Member at the time of import or export of “like products” to all other Members. This is a bedrock principle of the WTO.