Ups and Downs of the Variety of MFN: What’s Next?

We all know that the Most-Favoured-Nation (MFN) is the cornerstone of international economic governance, especially trade governance. Yet, policymakers and scholars of late have paid relatively little attention to its variety and evolution. Since MFN is not only a fundamental principle but also a key device to spur economic liberalization in an equitable manner, we should renew our interest in it. With the five types of MFN in mind (multilateral, regional, bilateral third-party, non-party automatic, and unilateral), this paper will first examine the historical ups and downs of economic liberalization spurred by the MFN. Then, from a theoretical standpoint, we will discuss the ‘backlash allowance’ or institutional flexibility of MFN, which we should properly take advantage of, but not abuse. The paper will finally consider which type of MFN is likely to be the key device for the governance of the complex international economy in the future.