What is a most-favored-nation clause in a credit agreement?
A contractual provision, also known as a most-favored-customer clause, prudent buyer clause, or non-discrimination clause, in which the seller promises the buyer that it will not offer another buyer better terms before offering those terms or better terms to the first buyer.
What does MFN mean in business?
most favoured nation
The most favoured nation (MFN) principle is based on the idea that countries should treat all their trade partners equally—that no one country should be “more favoured.” It means no country should give special treatment to goods or services coming from one particular trading partner.
What MFN means?
Most favoured nation
Share. The most favoured nation (MFN) principle is based on the idea that countries should treat all their trade partners equally—that no one country should be “more favoured.” It means no country should give special treatment to goods or services coming from one particular trading partner.
What is MFN in investment?
A Most Favored Nation clause, or MFN clause as it is commonly known, protects an investor by giving them the same rights and benefits received by later investors, if those rights and benefits are more favorable than those originally agreed.
What does MFN tariff mean?
most-favoured-nation
Normal non-discriminatory tariff charged on imports (excludes preferential tariffs under free trade agreements and other schemes or tariffs charged inside quotas).
What is the most favored nation clause?
The most favored nation clause requires them to apply a 5% tariff to all member countries. Along with the principle of national treatment, which is a principle of international law that requires the treatment of foreigners and local to be equal, the most-favored-nation clause is a foundation of the WTO’s trade law.
What is the origin of the term “most favored nation?
The modern concept appeared around the 18 th century, where it was usually applied between two countries – one country would grant another the status of “most favored nation.”
What is a most-favored-nation clause?
Updated Jun 12, 2019. A most-favored-nation (MFN) clause requires a country to provide any concessions, privileges, or immunities granted to one nation in a trade agreement to all other World Trade Organization member countries. Although its name implies favoritism toward another nation, it denotes the equal treatment of all countries.
What are the political implications of the MFN clause?
The Political Implications of the MFN Clause. Proponents of granting MFN status argued that tariff reductions on Chinese and Vietnamese goods might give the American consumer access to quality products at relatively low prices and enhance a mutually beneficial trade relationship with the two rapidly developing economies.