Trade

Why the most-favoured nation principle matters for business 

  • 5 March 2025

A rules-based global trading system, with the World Trade Organization’s (WTO) most-favoured nation (MFN) principle at its core, provides the stability and predictability that businesses require for strategic planning, investment decisions, and day-to-day operations.

Download the paper

Download the paper

Go directly to:

In today’s interconnected global economy, understanding the rules that govern international trade is essential for businesses of every size, everywhere.  

The most-favoured nation principle is a cornerstone of the WTO that ensures countries do not discriminate between their trading partners. According to the WTO, over 80% of global merchandise trade are conducted on most-favoured nation terms. 

But while the principle is one of the most fundamental WTO concepts, it is also frequently misunderstood. 

This report explains:  

  • What the most-favoured nation principle is in practical terms and common misconceptions 
  • How the principle relates to reciprocal and retaliatory tariffs 
  • How it impacts businesses and consumers 
  • Its importance for business operations, whether or not the business exports goods 
  • Its role in promoting equality and fairness in international trade 

Related publications 

  • 6 February 2025
  • News

ICC urges negotiation over retaliation on trade tariffs 

In a series of high-profile interviews with major media outlets, ICC Secretary General John W. H. Denton AO, has highlighted widespread concerns and uncertainties within the global business community as a result of threatened and imposed US tariff hikes. 

  • 14 February 2025
  • News

Global Trade Outlook 2025: Industry Insights

Business leaders worldwide have shared crucial insights with ICC on key trade policy challenges, highlighting the need for predictability in global markets.

  • 2 July 2025
  • Policies & reports

Country and regional analyses underscore urgency of WTO reform

Two studies commissioned by ICC and conducted by Oxford Economics highlight the devastating effects of a collapse of the WTO system. The 2024 report shows the severe impact on developing economies across regions. The 2025 follow-up report provides a detailed, country-level analysis across ten developing economies — Brazil, Cameroon, China, Egypt, Guatemala, India, Indonesia, South Africa, Türkiye, and Vietnam — confirming how a breakdown of the WTO would have damaging country-level consequences.

  • 16 November 2023
  • News

How to fix the WTO: A holistic framework for reform

ICC has proposed a framework that sets out a holistic vision for reform of the World Trade Organization (WTO) from the perspective of the global business community. Such a framework is necessary to ensure a comprehensive approach to reform across the three vital functions of the organisation.

  • 19 February 2025
  • News

Are value-added taxes a barrier to trade?

Understanding the differences between value-added taxes (VAT) and tariffs is crucial for informed international trade policy decisions. Providing insight into VAT and its role in global trade, this ICC policy brief clarifies the differences between VAT and import tariffs, illustrating how VAT operates as a consumption tax designed to be neutral and non-discriminatory towards foreign businesses.