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#Preferential treatment mac free#

#Preferential treatment mac free#

Exceptions for Regional Trade Agreements (in the framework of a customs union or free trade area) – Article XXIV GATS + Enabling clause/Article V GATS.

Contracting Parties) Decision of 25 June 1971, relating to the establishment of "Generalized, non-reciprocal and non-discriminatory preferences beneficial to the developing countries" (BISD 18S/24) and the Decision of 28 November 1979 on "Differential and More Favourable Treatment, Reciprocity, and Fuller Participation of Developing Countries" (L/4903), also known as the "Enabling Clause”.

Box 1 : EXCEPTIONS TO THE MFN PRINCIPLESĭerogations from the MFN treatment are conceded to developing countries, in respect of specific conditions, by the signatories of the GATT (i.e. Another notable exception is the Generalized System of Preferences (GSP) that allow developed countries to provide ‘unilateral’ tariff concessions on imports from developing countries. For instance, Article XXIV permits WTO Members to form regional trade agreements (free trade areas and customs unions), in which the Members being parties to such agreements may eliminate duties on imports from each other, while maintaining duties on imports from other countries. However, there are some exceptions (Box 1).

The MFN principle is a “cornerstone of the GATT and one of the pillars of the WTO trading system”. The MFN tariffs are therefore the customs duties imposed by a country on any WTO members without discrimination. The MFN principle, set forth in Article I of the GATT, requires that “any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties”.