What is most favored nation status?

Most Favored Nation (MFN) status is the standing that a nation enjoys within the World Trade Organization (WTO), and it implies that the country is being given the best trade treatment possible by its trading partners. Every WTO member country must grant MFN status to every other member. The WTO’s General Agreement on Tariffs and Trade (GATT) requires that MFN treatment be extended to all goods traded among WTO members; however, this rule has been waived in certain circumstances, such as for regional trade agreements. As of 2016, there are 164 members of the WTO. MFN status is also known as “national treatment” because it requires countries to treat imported goods no less favorably than they treat domestically produced goods. Countries are allowed to set their own tariff rates, but once a rate is set for one trading partner, it must be applied equally to all other MFN partners. The MFN principle is one of the most important aspects of the WTO’s work and helps to ensure that trade flows smoothly among its member countries.