In which type of trade agreement does the WTO allow exclusions
To the most favored nation principle?
A)multilateral trade agreements
B)freetrade areas
C)customs unions
D)freetrade areas and customs unions

Question

In which type of trade agreement does the WTO allow exclusions
To the most favored nation principle?
A)multilateral trade agreements
B)free­trade areas
C)customs unions
D)free­trade areas and customs unions

Quizplus · Accepted Answer

The WTO allows exclusions to the most favored nation principle in both free-trade areas and customs unions. Free-trade areas involve the elimination of tariffs and other trade barriers between member countries, but each member retains its own external tariffs towards non-members. Customs unions go further by harmonizing external tariffs among member countries. Both types of agreements can include exemptions and exceptions from the most favored nation principle, as long as they do not undermine the basic principles of the WTO.

In Which Type of Trade Agreement Does the WTO Allow