The "most favored nation principle" means:
A)that member countries can enter into exclusive favorable agreements with some countries.
B)that member countries are barred from forming agreements outside their geographic vicinity.
C)that member countries must apply the same low tariffs to all WTO member countries.
D)that member countries must apply differential tariffs on imports from nonWTO countries.

Question

The "most favored nation principle" means:
A)that member countries can enter into exclusive favorable agreements with some countries.
B)that member countries are barred from forming agreements outside their geographic vicinity.
C)that member countries must apply the same low tariffs to all WTO member countries.
D)that member countries must apply differential tariffs on imports from non­WTO countries.

Quizplus · Accepted Answer

The most favored nation principle requires that member countries of the WTO offer the same low tariffs to all member countries. This principle is intended to promote equal treatment for all trading partners and prevent discrimination against certain countries. Option A is incorrect because the most favored nation principle prohibits exclusive favorable agreements with certain countries. Option B is incorrect because there is no geographical limitation on the most favored nation principle. Option D is incorrect because the principle requires equal treatment for all WTO member countries, not differential treatment for non-WTO countries.

The "Most Favored Nation Principle" Means