UGC NET Exam > UGC NET Questions > Most-favoured-nation treatment means:a)A trea...
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Most-favoured-nation treatment means:
- a)A treatment extended to a State's own nationals
- b)A treatment similar to the one extended to any third State
- c)A favourable treatment extended to a particular State
- d)None of these
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
Most-favoured-nation treatment means:a)A treatment extended to a State...
This aligns with the WTO's principle that any favorable treatment given to one country must be extended to all countries that are part of the MFN arrangement, ensuring non-discrimination and equal treatment in trade relations.
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Most-favoured-nation treatment means:a)A treatment extended to a State...
Understanding Most-Favoured-Nation Treatment
Most-favoured-nation (MFN) treatment is a critical concept in international trade and economic agreements. It refers to a principle that ensures equal trading opportunities among countries.
Definition of MFN Treatment
- MFN treatment means that if a country grants a benefit or favor to one trading partner, it must extend the same benefit to all other countries that are also part of the MFN agreement.
Explanation of Option B
- Option B states that MFN treatment is a treatment similar to the one extended to any third State. This is correct because MFN ensures that no nation receives preferential treatment over another. It promotes fairness and equality in trade relations.
Importance of MFN Treatment
- Encourages Trade: By ensuring that all countries are treated equally, MFN treatment encourages nations to engage in trade more freely without the fear of discrimination.
- Stability in Trade Relations: MFN provides a predictable framework for international trade, which can enhance economic stability among nations.
Implications of MFN Treatment
- Wider Market Access: Countries benefit from broader access to markets as they cannot be discriminated against in favor of other nations.
- Negotiation Leverage: Countries can use MFN provisions as leverage in negotiations, knowing that any concessions made will apply to all parties involved.
Conclusion
In summary, the correct answer is option 'B', as most-favoured-nation treatment guarantees that countries will receive the same treatment as any other third state, promoting equality and fairness in international trade relations.
Most-favoured-nation (MFN) treatment is a critical concept in international trade and economic agreements. It refers to a principle that ensures equal trading opportunities among countries.
Definition of MFN Treatment
- MFN treatment means that if a country grants a benefit or favor to one trading partner, it must extend the same benefit to all other countries that are also part of the MFN agreement.
Explanation of Option B
- Option B states that MFN treatment is a treatment similar to the one extended to any third State. This is correct because MFN ensures that no nation receives preferential treatment over another. It promotes fairness and equality in trade relations.
Importance of MFN Treatment
- Encourages Trade: By ensuring that all countries are treated equally, MFN treatment encourages nations to engage in trade more freely without the fear of discrimination.
- Stability in Trade Relations: MFN provides a predictable framework for international trade, which can enhance economic stability among nations.
Implications of MFN Treatment
- Wider Market Access: Countries benefit from broader access to markets as they cannot be discriminated against in favor of other nations.
- Negotiation Leverage: Countries can use MFN provisions as leverage in negotiations, knowing that any concessions made will apply to all parties involved.
Conclusion
In summary, the correct answer is option 'B', as most-favoured-nation treatment guarantees that countries will receive the same treatment as any other third state, promoting equality and fairness in international trade relations.
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Most-favoured-nation treatment means:a)A treatment extended to a States own nationalsb)A treatment similar to the one extended to any third Statec)A favourable treatment extended to a particular Stated)None of theseCorrect answer is option 'B'. Can you explain this answer?
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