Question

According to the most favored nation clause (Article I of GATT), which of the following is true?

A. Tariffs on products imported from countries belonging to the WTO must be lower than tariffs on the same products imported from countries that are not members of the WTO.
B. A country can lower tariffs on imports from countries with most favored nation trading status without changing tariffs on imports from other members of the WTO.
C. If a country gives a trade advantage to one partner, then this advantage must be extended to all its trading partners belonging to the WTO.
D. If a country imposes higher tariffs on one trading partner, then those high tariffs must be imposed on all its trading partners belonging to the WTO.

Answer 1

C. If a country gives a trade advantage to one partner, then this advantage must be extended to all its trading partners belonging to the WTO.

Step-by-step explanation:

The correct option is - C. If a country gives a trade advantage to one partner, then this advantage must be extended to all its trading partners belonging to the WTO.

Reason -

Most-favoured-nation (MFN): treating other people equally Under the WTO agreements, countries cannot normally discriminate between their trading partners. Grant someone a special favour (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members.