What is MFN status? How does the WTO reconcile the principle of equal treatment with the preferential treatment created by regional trade agreements?
What will be an ideal response?
MFN status is basically that you will treat all nations participating in the agreement the same. A regional trade agreement creates preferential treatment for nations that are participants. (For example, because of NAFTA, Mexico and Canada get more preferential terms with the United States than other WTO members would.) The WTO recognizes that regional agreements destroy some opportunities for trade (by making nonmembers face higher barriers than members), but believes they create more trade between participants than they destroy. The regional agreements also allow nations to try out new arrangements that may later be adopted more broadly.
You might also like to view...
If Farmer Sam MacDonald can produce 200 pounds of cabbages and 0 pounds of potatoes or 0 pounds of cabbages and 100 pounds of potatoes and faces a linear possibilities curve for his farm, the opportunity cost of producing an additional pound of cabbage is ____
A) 1/2 B) 2 C) 100 D) 200
The "wealth effect" of lower interest rates is that bond prices are __________ so people respond to this by __________ consumption and thus __________ aggregate demand
A) increased; increasing; increasing B) increased; increasing; decreasing C) lowered; increasing; increasing D) lowered; increasing; decreasing