Most Favoured Nation treatment (MFN)
A non discriminatory trade policy commitment on the part of one country to extend to another country the lowest tariff rates it applies to any other country. All contracting parties to the General Agreement on Tariffs and Trade (GATT) – now World Trade Organization (WTO) – undertake to apply such treatment to one another under Article 1 of the treaty. Under MFN principles, when a country agree to cut tariffs on a particular product imported from one country, the tariff reduction automatically applies to imports of this product from any other country eligible for most favoured nation treatment. This principal of non discriminatory treatment of imports appeared in numerous bilateral trade agreements prior to the establishment of the GATT.