GlossaryEN1 min readUpdated: Jun 26, 2026

Preferential tariff rate

A preferential tariff rate is a reduced or zero duty applied to goods originating in a country or territory covered by a free trade agreement or preference scheme, distinguishable from the MFN (Most Favoured Nation) rate that applies in the absence of any specific trade arrangement and is typically higher.

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Last updated: 26 June 2026Published: 22 November 2025

Source: https://www.wto.org

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Definition & Explanation

A preferential tariff rate is a reduced or zero duty applied to goods originating in a country or territory covered by a free trade agreement or preference scheme, distinguishable from the MFN (Most Favoured Nation) rate that applies in the absence of any specific trade arrangement and is typically higher. Claiming the preference always requires valid proof of origin — a certificate of origin or supplier's declaration — showing that the goods satisfy the rules of origin of the applicable agreement. In customs practice, the broker verifies at the time of import entry which agreement is relevant and whether the supporting documents are complete; absent proof, the standard MFN rate applies by default. Depending on the agreement and product group, preferential rates may be phased in over a transition period rather than applied in full from day one.

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