The most favored nation principle means that
A) one nation is selected to benefit the most from free trade.
B) if a state lowers a tariff toward one General Agreement on Tariffs and Trade (GATT) member, it is obliged to give all members the same low tariff.
C) regional trading partners are given favorable trading terms.
D) the GATT ensures that one country receives preferential trade treatment.

Question

Quizplus · Accepted Answer

The most favored nation principle means that if a state lowers a tariff toward one General Agreement on Tariffs and Trade (GATT) member, it is obliged to give all members the same low tariff. It is a fundamental principle of the World Trade Organization (WTO) and aims to promote non-discrimination in international trade. Therefore, option B is the correct answer. Options A, C, and D are incorrect as they do not accurately represent the most favored nation principle.

The Most Favored Nation Principle Means That