MFN
Category: trade
Most Favoured Nation — WTO principle requiring equal tariff treatment for all member countries.
Most Favoured Nation (MFN) is a WTO principle requiring member countries to grant the same trade advantages (e.g., tariff rates) to all other WTO members equally. MFN tariff rates are the standard (non-preferential) tariff rates applied to imports from countries without a specific FTA. In practice, MFN rates serve as the baseline tariff, while FTAs offer lower preferential rates.
Examples
- • The US MFN tariff rate for headphones (HTS 8518.30) is 4.9%, applied to imports from WTO member countries without a specific FTA.
- • China joined the WTO in 2001 and benefits from MFN rates in most WTO countries, but the US has imposed additional Section 301 tariffs on many Chinese goods.
- • MFN rates are the starting point; sellers must check whether an FTA provides lower preferential rates for their specific product and trade route.