Principle of MFN in a Preferential Trade Era

Ever since the emergence of International Trade, the global economy has focused on ensuring that trade between nations occurs in a fair and equitable manner. With the adoption of GATT and the eventual establishment of WTO, the same theme has continued. Principles of non-discrimination such as national treatment, most favoured nation and reciprocity are integral to the smooth functioning of international trade. But in the recent few decades we find countries shifting to a different practice in order to achieve their economic goals. The preferential trade era has opened new avenues for nations to achieve short term economic goals. They believe that bodies such as WTO have struggled recently to take into account the economic and developmental needs of all participating nation. According to them, the multilateral process is slow and does not cater to the needs of all. Such limitations of the current international trade regime have led the countries to move towards PTA’s. This has created a spaghetti bowl of trade arrangements which are complex and are a convoluted mess