Once Afghanistan joins WTO, all 159 other members must apply to Afghan exports the best treatment that they apply to the goods of any other WTO member country. This will be an advantage for Afghan exports.
MFN treatment covers both discrimination de facto and de jure. It does not matter if a measure legally treats goods from all countries the same, if the goods from one country are in fact given treatment less favorable than goods from another country, discrimination applies.
MFN covers all goods, bound or unbound (see Principle 2 below). A country cannot select which imports get MFN treatment.
MFN treatment must be granted immediately and unconditionally. For instance, a country cannot tie MFN treatment to certain conditions, such as importing a specific amount, or following a specific environmental standard.
There are exceptions to MFN treatment. In fact, much of the world’s trade is not conducted in accordance with the MFN treatment obligation. There are hundreds of bilateral and regional treaties which offer special treatment to the goods of neighboring countries or strategic partners.
Afghan exports already receive preferential treatment from many countries because Afghanistan is considered a Least Developed Country. Preferential treatment is an exception to the MFN principle. However, preferential treatment is granted at the discretion of the granting country, meaning that it can be removed from the special treatment anytime.
By contrast, MFN treatment is guaranteed to all WTO member countries and cannot be removed. For this reason, joining WTO and getting MFN treatment for Afghan exports will be such an important advantage for Afghanistan.
National Treatment
National Treatment means that foreign imported goods, after they cross the border, should be treated no less favorably than domestically-produced goods. The underlying rationale behind national treatment is to ensure that tax and domestic regulation are not used to restrain trade.
The national treatment obligation is found in Article III of GATT, 1994. It compels member states to avoid using taxes or regulations so as to afford protection to domestic production. For instance, the government of Afghanistan cannot put a special tax on foreign cement in order to protect Afghan-produced cement.
National treatment only applies after imported goods have crossed the border. Foreign imports are obviously subject to tariffs at the border. Additionally, national treatment only applies to government measures. National companies like banks or manufacturers are free to give better treatment to special customers.
Like Most Favored Nation (MFN) treatment, national treatment applies to all products, not just bound products. Incentives for importing manufacturers to source their inputs locally or other domestic content rules are strictly forbidden.