Countries A,B,and C belong to GATT.Countries X and Y do not.A has a 7% tariff on televisions from B.C,X,and Y also export televisions.Under unconditional most-favored-nation trade of GATT:
A) countries C, X, and Y are entitled to a 7% tariff on televisions.
B) countries X and Y are entitled to a 7% tariff on televisions.
C) country C must petition A under GATT to get a 7% tariff on televisions.
D) country C gets an automatic 7% tariff rate on televisions.

Question

Quizplus · Accepted Answer

The principle of the Most-Favored-Nation (MFN) under GATT (General Agreement on Tariffs and Trade) ensures that any trade advantage, like a lower tariff rate, given by one member country to another must be extended to all other member countries. Since countries A, B, and C are members of GATT, country C automatically gets the same 7% tariff rate on televisions that country A has given to country B. Countries X and Y, not being members of GATT, do not automatically benefit from this arrangement.

Countries A,B,and C Belong to GATT