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          Nondiscrimination in GATT/WTO: Was There Anything to Begin with and is There Anything Left? (English)
          Discussion paper by T.N. Srinivasan, 2005, 27 pages
          Categories: WTO Issues/Multilateral Trading System

          What: Non-discriminatory treatment is one of the main principles of the World Trade Organization (WTO). Under normal circumstances countries cannot discriminate between their trading partners: they must accord the same preferences to one country as they do to all their trading partners (Most Favoured Nation Principle [MFN]). Under WTO rules foreigners and locals also have to be treated equally in domestic markets (National Treatment [NT]). However, exceptions to non-discriminatory treatment are outlined in the WTO articles relating to customs unions and free trade areas, antidumping and safeguards. In this paper the author argues that these exceptions have become dominant over the past few years causing an erosion of the non-discrimination principle. In Section 2, non-discriminatory treatment, as mandated in the General Agreement on Tariffs and Trade (GATT), is outlined. Section 3 summarizes the exceptions to non-discrimination in the WTO. Section 4 examines the role of MFN and reciprocity as a means of self-enforcement of the GATT contract. In section 5 aspects of MFN and NT are analyzed with a simple theoretical model. Section 6 offers a conclusion on the role of non-discrimination in GATT/WTO. Who: For anyone dealing with the non-discrimination principle of the WTO. How: Can serve as an additional reading for anyone dealing with the non-discrimination principle of the WTO. Preliminary knowledge of the principles of non-discrimination and of economic theory would be an asset.

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