Q. With reference to the Most Favoured Nation (MFN) principle under the World Trade Organization (WTO), consider the following statements:
1.Under the MFN principle, a country is obligated to provide the same trade advantages to all WTO members as it does to its most-favoured trading partner.
2.WTO members cannot withdraw MFN status from any country under any circumstances.
Which of the statements given above is/are correct?
Answer: A
Notes:
Explanation:
- Statement 1 is correct: The MFN principle ensures equal treatment to all WTO members—any advantage given to one must be extended to all.
- Statement 2 is incorrect: While there’s no formal WTO procedure for suspending MFN, members can effectively withdraw such treatment in certain situations, such as national security concerns. For example, India withdrew Pakistan’s MFN status in 2019.
Source– IE
