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Current Affairs

Most Favoured Nation status

Date: 15 March 2022 Tags: World Economy


Russia’s “most favoured nation” (MFN) status will be revoked by the United States, the European Union, Britain, Canada and Japan.



The Russian invasion of Ukraine has attracted ire of western bloc and their allies, who are targeting Russia economically.



  • It is a commitment of a country to treat other countries equally so they can all benefit from each other’s lowest tariffs, highest import quotas and fewest trade barriers for goods and services.

  • This principle of non-discrimination provided by the 164 members of World Trade Organisation is known as most favoured nation (MFN) treatment. 

  • Exceptions to MFN include bilateral trade agreements between countries and members offering developing countries special access to their markets.

  • WTO members can impose trade measures without breaking rules on countries outside WTO such as Iran, North Korea, Syria and Belarus.


Revoking MFN status

A formal procedure is not present for revoking MFN status, or whether WTO has to be informed. India had revoked MFN status of Pakistan after Pulwama attack.


Effects of losing MFN status

  • It means that western countries do not consider Russia an economic partner in any way. It is a signal sent to express their position. It does not affect trade conditions.

  • These countries can impose quota or higher tariffs on Russian goods. They can also completely ban them and restrict services. Russian IPR can also be overlooked.

  • The US has already banned Russian gas and oil. Canada also revoked MFN status of Russia and its ally Belarus.


Products being banned

  • European Union has banned import such as tobacco, potash and products made of wood or steel from Belarus.

  • Russian imports like mineral fuels, precious metals and stones, iron and steel, fertilizers and inorganic chemicals could also be banned in future.