Over 80 per cent of global merchandise trade is on most-favoured-nation basis
Geneva, 22 January 2025 — Over 80 per cent of global merchandise trade is conducted on a most-favoured-nation (MFN) basis, according to a new report by the World Trade Organization (WTO).
The report, “MFN Treatment in World Trade: A Statistical Overview,” found that MFN-based trade increased by 5 per cent in 2024, reaching a total value of USD 22 trillion. This growth was driven by strong demand for goods from developing countries, particularly in Asia.
MFN treatment is a cornerstone of the multilateral trading system. It requires WTO members to treat all other members equally in terms of tariffs and other trade regulations. This principle helps to ensure that trade is fair and non-discriminatory.
The report found that MFN treatment is most common in developed countries, where it accounts for over 90 per cent of trade. Developing countries are also increasingly adopting MFN treatment, with over 70 per cent of their trade now conducted on this basis.
The report also found that MFN treatment is most common for traded goods, such as manufactured goods and agricultural products. Services trade is less likely to be conducted on an MFN basis, with only about 60 per cent of services trade being covered by MFN agreements.
The WTO’s report on MFN treatment is an important resource for policymakers and researchers. It provides valuable data on the extent of MFN treatment in world trade and helps to identify areas where further progress can be made.
Key findings of the report
- Over 80 per cent of global merchandise trade is conducted on a most-favoured-nation (MFN) basis.
- MFN-based trade increased by 5 per cent in 2024, reaching a total value of USD 22 trillion.
- MFN treatment is most common in developed countries, where it accounts for over 90 per cent of trade.
- Developing countries are also increasingly adopting MFN treatment, with over 70 per cent of their trade now conducted on this basis.
- MFN treatment is most common for traded goods, such as manufactured goods and agricultural products.
- Services trade is less likely to be conducted on an MFN basis, with only about 60 per cent of services trade being covered by MFN agreements.
Implications of the findings
The findings of the report have several implications for policymakers and researchers.
- First, the report highlights the importance of MFN treatment in the multilateral trading system. MFN treatment helps to ensure that trade is fair and non-discriminatory, and it promotes economic growth and development.
- Second, the report suggests that there is still room for progress in expanding MFN treatment. This could be done through bilateral and plurilateral trade agreements, as well as through the WTO’s ongoing negotiations on trade in services.
- Third, the report provides valuable data for researchers studying the impact of MFN treatment on trade and development. The data can be used to assess the impact of MFN treatment on trade flows, economic growth, and poverty reduction.
Conclusion
The WTO’s report on MFN treatment is an important resource for policymakers and researchers. It provides valuable data on the extent of MFN treatment in world trade and helps to identify areas where further progress can be made. The report’s findings highlight the importance of MFN treatment in the multilateral trading system and suggest that there is still room for progress in expanding MFN treatment.
Over 80 per cent of global merchandise trade is on most-favoured-nation basis
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