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What is the meaning of Most Favored Nation and what is its advantage?

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What is the meaning of Most Favored Nation and what is its advantage?
posted Sep 27, 2016 by Salil Agrawal

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In international economic relations and international politics, "most favoured nation" (MFN) is a status or level of treatment accorded by one state to another in international trade. The term means the country which is the recipient of this treatment must, nominally, receive equal trade advantages as the "most favoured nation" by the country granting such treatment. (Trade advantages include low tariffs or high import quotas.) In effect, a country that has been accorded MFN status may not be treated less advantageously than any other country with MFN status by the promising country.
benifits-
1-Increases trade creation and decreases trade diversion,
2-MFN allows smaller countries.
3-MFN restrains domestic special interests from obtaining protectionist measures.
source-https://en.wikipedia.org/wiki/Most_favoured_nation

answer Sep 29, 2016 by Devendra Bohre
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