GlossaryEN1 min readUpdated: Jun 18, 2026
Most-Favored-Nation Clause
A Most-Favored-Nation (MFN) Clause is a trade law principle obligating a country to extend to any trading partner the most favorable tariff rates and trade conditions it grants to any other country for comparable goods.
Quick Answer
Last updated: Published:
Source: https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm
Category
Incoterms 2020 Simulator: Who bears costs & risk?
Reading time
1 min
Words
115
Mentioned in
–
Definition & Explanation
A Most-Favored-Nation (MFN) Clause is a trade law principle obligating a country to extend to any trading partner the most favorable tariff rates and trade conditions it grants to any other country for comparable goods. Enshrined in GATT Article I, it forms the cornerstone of non-discriminatory treatment within the WTO framework. In practice, any tariff reduction negotiated bilaterally must automatically apply to all WTO members — preventing selective advantages that would distort global competition. Recognized exceptions include regional free trade agreements and preferential schemes for developing countries, provided they meet WTO criteria. The MFN principle is distinct from national treatment, which governs the equal treatment of imported and domestic goods once they have cleared customs.
Next steps
Matching tools and partners
Related Terms
You might also be interested in these terms
⚖️ ICC Incoterms 2020
Incoterms 2020 Simulator: Who bears costs & risk?
Analyze all 11 Incoterms 2020: cost matrix, risk timeline, insurance gap detector and customs responsibility – free, no login required.
Logistics knowledge straight to your inbox
Free · No password · Never a paywall. Weekly top news and facts from logistics.
Community Questions & Answers
Share your knowledge, ask follow-up questions, or add practical insights to this page. Every contribution is moderated before publication.
No community answers yet. Be the first.