Equality of Treatment vs. Discrimination in GATT: Article I(I)

Abstract

Broadly speaking, the most-favoured-nation clause in international agreements is designed to ensure that each party will be treated on exactly the same footing as the most favoured third country. The clause is nothing more than the legal embodiment of a precaution against discriminatory treatment.¹ States other than the promisor and beneficiary form the tertium comparationis. ² Most-favoured-nation treatment does not demand compliance with any definite or objective rules of conduct. The rights which a state enjoys under the standard are the counterpart of the rights granted by the promisor to third States. In the absence of undertakings to third states the most-favoured-nation standard is an empty shell and “in operation, it is a shell with variable — and continuously varying — contents.” ³ Another basic characteristic of the clause is that it is not compatible with any discrimination on the part of the promisor against the beneficiary and in favour of third States.