As globalization deepens, the contradiction between the surge in regional trade agreements (RTAs) and the "most-favored-nation" (MFN) principle in the multilateral trading system has become increasingly prominent. A regional trade agreement is an agreement signed between two or more countries/regions, aimed at deepening economic integration among member states through measures such as reducing or eliminating tariffs, lowering non-tariff barriers, and harmonizing rules. In contrast, MFN requires that all WTO members be treated equally in terms of trade policies. This means that if one country grants tariff reductions or special privileges to another member, these benefits must immediately and unconditionally extend to all WTO members. The two principles are inherently at odds with each other. RTAs form exclusive trading zones through internal preferential arrangements, directly challenging the non-discriminatory commitments of MFN. This paper analyzes mechanisms such as trade diversion effects, rule fragmentation, and geopolitical games, combining empirical data and case studies to argue for the weakening effect of RTA expansion on the universality of MFN. The research finds although MFN remains the cornerstone of the international trade system, its scope continues to shrink under the pressure of RTAs. To address this challenge, the paper proposes policy paths including WTO reform, enhancing the flexibility of MFN, and promoting open regionalism, to balance the contradictions between multilateral and regional trade mechanisms and maintain the inclusiveness and stability of the global trading system.
Li et al. (2025) studied this question.