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MFN full form in commerce is Most Favoured Nation. The term MFN is used in international trade. MFN or Most Favoured Nation refers to the treatment that an issuing country extends to the receiving country concerning tariffs, duties, as well as trade regulations. According to the MFN principle, a country cannot discriminate against other countries by imposing higher or variable tariffs or trade barriers on their products or services. If you want to know more about MFN full form and its principles, then keep reading this article!
Also Read: What is the Full Form of GATT?
What is the Definition of MFN?
Table of Contents
MFN or Most Favoured Nation refers to the status granted by one country to another for foreign exchange of goods and services. It means that the recipient country should be treated equally with MFN by granting similar benefits and terms of tariffs. Besides that, MFN status is granted under the GATT (General Agreement on Tariffs and Trade). The MFN treatment helps to facilitate fair and open trade between all countries.
The MFN principle is a crucial aspect of the WTO, which needs all its members to extend the MFN treatment. This treatment aims to decrease trade barriers eradicate any kind of trade discrimination between nations, and create level playing fields for all trading countries.
Also Read: What is the Full Form of FTA?
What are the Benefits of MFN?
Mentioned below are the benefits of MFN:
- Non-discrimination
- Equal treatment
- Automaticity
- Transparency
- Reciprocity
- Limited exemptions
- Increased trade
- Greater market access
- Improved economic growth
- Enhanced economic stability
- Improved relations
Also Read: What is the Full Form of IFTU?
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