Foreign Policy Watch: India-Pakistan

Govt says no proposal to review Most Favored Nation status to Pakistan


Mains Paper 2: IR | India & its neighborhood- relations

From UPSC perspective, the following things are important:

Prelims level: MFN status, General Agreement on Tariffs and Trade, WTO

Mains level: India-Pakistan relationship despite long standoff

MFN status to Pakistan

  1. The government has denied any proposal to review the ‘most favoured nation’ (MFN) status to Pakistan
  2. India has accorded MFN status to all WTO members, including Pakistan, in accordance with the provisions of the General Agreement on Tariffs and Trade

What does MFN status mean?

  1. Under MFN, a WTO member country is obliged to treat other trading nation in a non-discriminatory manner, especially with regard to customs duty and other levies


General Agreement on Tariffs and Trade (GATT)

  1. The General Agreement on Tariffs and Trade (GATT) covers international trade in goods
  2. Its overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas
  3.  The workings of the GATT agreement are the responsibility of the Council for Trade in Goods (Goods Council) which is made up of representatives from all WTO member countries
  4. GATT was signed by 23 nations in Geneva on October 30, 1947, and took effect on January 1, 1948
  5. It remained in effect until the signature by 123 nations in Marrakesh on April 14, 1994, of the Uruguay Round Agreements, which established the World Trade Organization (WTO) on January 1, 1995
  6. In addition to facilitating applied tariff reductions, the early GATT’s contribution to trade liberalization include
  • binding the negotiated tariff reductions for an extended period (made more permanent in 1955),
  • establishing the generality of nondiscrimination through most-favoured-nation (MFN) treatment and national treatment,
  • ensuring increased transparency of trade policy measures, and
  • providing a forum for future negotiations and for the peaceful resolution of bilateral disputes.
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