What is the difference between mfn and national treatment

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Sign up. More Contact us Publish with us Subscribe Accessibility. Print Email. The distinction between National Treatment and Most-Favoured-Nation is similar however is still viewed significant difference. National Treatment rules applies first of all to national of the member countries. Each member country shall accord to the nationals of other member countries treatment no less favorable than that it accords to its own nationals with regard to the protection of intellectual property.

The protecting country must grant the same protection to nationals of other member countries as it grants to its own nationals. In another words you must to treat foreigners and locals equally. Pursuant to the article 4 of the TRIPS Agreement on Most-Favored-Nation treatment requires that, with regard to the protection of Intellectual Property, any advantage, favor, privilege or immunity granted by a Member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other Members.

De jure means when the extra advantage or benefit is given to any of the nation or member nation which can be recognised by the legal value or through legal instruments and that too without extending such advantage of like products to all WTO Members.

When the discrimination cannot be recognised directly through words or face of the legal instrument, then it can still be de facto, and discriminatory. De facto discrimination occurs when there can or cannot be an issue of a legal instrument but the discrimination can be found in the material facts. To establish de facto discrimination, all the facts relating to the application of the measure must be reviewed. Therefore in this case both the tax slabs has different perspective for taxing the bikes and the discrimination cannot be found through de jure aspect as both the manufacturing are of different nature but the discrimination can be recognised capital-intensive concept of de jure and it can be easily understood that the discrimination is recognised by considering facts of the case and not only by the considering legal aspects.

One needs to check these three elements to find an inconsistency with MFN principles:. Article I:1 covers a broad range of measures in relation to exportation and importation as well as internal measures. Such measures include the following:. When the panel recognised it as a like product, the panel explained that there could be no chances of imposing tariff differently as all the types of coffee are Like Product. This means that once a WTO Member has granted an advantage or any privilege to imports from any country, then that WTO member must immediately and unconditionally grant that advantage to all the other member nations with respect to imports of all the like products from all WTO Members.

In Indonesia — Autos case , the main issue was that Indonesia has framed a few policies which classified the tariff rate of manufacturing automobile. In this case, the Panel held that according to MFN principle the right of Members cannot be made conditional on any criteria and making such conditional policy violates the principle laid down in the provisions of Article I:1 of GATT With the change in the internal government of India, the new India government framed new policies and rules related to import and sale of all the beverages.

The new government classified beverages as per the level of preservative all types of natural preservatives added in it. India is not capable or efficient in producing the best quality beverages for their people and due to such reasons, it imports all such products from many WTO Members.

However, the beverages are imported from both the country Canada and Thailand. NTP deals with the products of any member imported by any other member shall not be treated less favourable than that to like products of national or domestic product in respect of all laws, regulations, requirements affecting their internal sale etc.

So reading NTP with MFN gives a brief difference between both of the principles that one deals with protectionism and MFN deals with favourable treatment to all nations. Now it can be assumed that the main purpose of Article III of the GATT was to prohibit or limit the use of trade-restricting by requiring non-discriminatory treatment between imported and domestic goods.

For better understanding, we may classify NTP into 3 different categories:. Just like the MFN principle, the scope of the NTP also covers the scope of de jure and de facto discrimination of imported products.