The Relevance and Applicability of the Most-Favoured-Nation Treatment Clause in International Trade Agreements

The paper examines the relevance and applicability of the Most-Favoured-Nation Treatment Clause in International Trade Agreement. The paper articulates other World Trade Organization (WTO) standards, such as National Treatment and the International Minimum Standards. The MFN is an instrument adopted by WTO to reduce discrimination and enhance transparency in international exchange of goods, services, investments, and property rights. The paper revealed that the MFN standards are substantive acknowledgement of the classical liberal approach to international trade, as expounded by Smith, Harberler, etc. The paper noted that developing countries have not benefitted sufficiently from the various treatment standards. First, trade have not been so liberalized by the industrialized countries because of protectionist regimes, while low capital, manpower and technological exports of the LDCs have limited the chances of the poor countries to benefit from trade agreements. A liberal trade agreement anchored on MFN and other standards of the multilateral institutions will culminate in an agreement between unequals. The LDCs do not have the investment capacity. Thus the opportunities provided by the various treatment standards are reaped by the superior partners on the agreement between the LDCs and the industrialized countries. The paper suggests that LDCs should explore more of Bi-lateral agreements. In Bi-lateral agreement the developing countries, using experts can negotiate trade agreement that will accommodate the economic policy of government and development plans. It is also instructive that African countries improve in the production of capital goods and technology for export. Export of tertiary goods and technology will launch African countries into the competitive world trade.