Principle of Most Favoured Nation: Description, Modern Evolution, and Analysis of the Exceptionality of the Principle in A Contemporary World

Frans Lavdari

doi:10.21467/exr.1.1.4296

Authors

Frans Lavdari Department of Business and Management, LUISS Guido Carli University https://orcid.org/0000-0002-0137-0818

DOI:

https://doi.org/10.21467/exr.1.1.4296

Abstract

The "most favoured nation" principle is the cornerstone of the modern international trading system. Each state is obliged to reflect the benefits it offers a nation over other WTO adherents as well. This system, however, although it proved effective until the last century for the creation of an international free trade system, today has lost its capabilities, mainly degraded by “private” international agreements between nations, such as RTA, FTA, PTA and REIO, who have torn apart the principle and created groups of nations, each with their own personal advantages which are bestowed only on the nations adhering to the agreement. The following sections aim to give a description of this phenomenon and its evolutions up to modern times, through an analysis of the various exceptionality of the "most favored nation" principle, of the situation of modern free trade agreements, and of the effects both for national legislations and markets, in order to be able to understand what are the conditions facing the global market today and, above all, if the principle of "non-discrimination" is still a cornerstone in the trade relations in the MFN.

Keywords:

GATT, WTO, MFN

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