WTO Final Project The WTO agreements provide for MFN treatment with an intention of multilateralizing as well as liberalizing trade via the enhancement and promotion of service and trade equality between the World Trade Organization (WTO) member states. To be more specific, the MFN principle means that “under the WTO agreements, countries cannot normally discriminate between their trading partners” (WTO, 2019). Thus, as WTO further suggests, no special favors should be advanced to anyone that are not accessible to other WTO members. The said favors in this case could include, but they are not limited to, lower customs duty rate for certain products. It should, however, be noted that the intention highlighted above no longer appears operational due to, in part, the incorporation of factors that conflict with the original purpose of the provision of the MFN treatment in WTO agreements. It is important to note that the burden of The Sutherland Report’s Chapter II “is the erosion of the unconditional most-favored-nation (MFN) principle and the resulting grief to the world trading system” (McKinney and Gardner, 2008, p. 215). Towards this end, it would be prudent to assess assertions voiced in the said chapter.

In essence, under GATT, the MFN treatment has in some quarters been deemed a critical step towards services and trade discrimination. This is more so the case given that the MFN treatment obligation effectively discourages countries from engaging...

It should, however, be noted that as the Southerland Report points out, “decades after the founding of the GATT, MFN is no longer the rule; it is almost the exception…” (Addo, 2014, p. 182). The emasculation of the MFN treatment obligation started with the move to provide some protection to various factors seen to be in conflict with trade liberalization. These factors include, but they are not limited to, societal interests and values. Towards this end, insertions were made in GATT as exceptions – with states in this case being permitted, in some special circumstances, to embrace inconsistent measures. Some of the said MFN treatment exception relate to balance-of-payments (BOP), regional trade agreement (RTAs), and security (Cohn, 2008). When it comes to RTA exceptions, depature from MFN principles is justified when there is need to advance service suppliers or goods preferential treatment when the said services or goods originate from trading partners within either a free trade area or customs union (Cohn, 2008). In this case, the said preferential treatment may not be replicated with reference to all World Trade Organization member states. On the other hand, exceptions that relate to balance-of-payments grant the justification to adopt the relevant course of action in seeking to protect the BOPs and the financial position (external) of a member (Cohn, 2008). We also have security exceptions. In this case,…