10. Define key principles of trade in goods.

1. Trade without discrimination

   • Most-favoured-nation clause (MFN). Most-Favoured Nation (MFN) Treatment means that the best treatment given to any country must be given to all countries. In other words, any benefit given to a product of a most-favoured nation (whether GATT Member or not) has to be given to the like products of all Members. According to GATT Article I.1 MFN treatment in relation to goods is:… any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties.

   • National treatment. National Treatment (NT) prohibits discrimination between foreign and national products, services, and service suppliers, as well as between foreign and national intellectual property rights holders. For example, once a foreign product has been cleared through customs, it cannot be treated any differently from a like product produced domestically. GATT Article III.1 and 4, “The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use. The provisions of this paragraph shall not prevent the application of differential internal transportation charges which are based exclusively on the economic operation of the means of transport and not on the nationality of the product”.

2. Reciprocity. The WTO agreement serves as a type of binding contract under which members voluntarily accept a "negotiated equilibrium" of rights and obligations that they see as being in their mutual interest. This negotiated equilibrium exemplifies the principle of reciprocity. Concessions negotiated in this way are then multilateralized under the most-favoured nation rule. Broadly speaking, the principle of reciprocity in the GATT/WTO refers to the ideal of mutual changes in trade policy that trigger changes in the volume of each country’s imports that are of equal value to changes in the volume of its exports. But it is practicable only between developed nations due to their roughly matching economies. For trade between them and developing nations, the concept of relative reciprocity is applied whereby the developed nations accept less than full reciprocity from their developing trading partners.

3. Market access. Market access for goods in the WTO means the conditions, tariff and non-tariff measures, agreed by members for the entry of specific goods into their markets. Tariff commitments for goods are set out in each member's schedules of concessions on goods. The schedules represent commitments not to apply tariffs above the listed rates — these rates are “bound”. Non-tariff measures are dealt with under specific WTO agreements. WTO Members seek to continually improve market access through the regular WTO work programme and through negotiations such as those launched at the Doha Ministerial Conference in November 2001. Main principles of market access are:

• Transparency

• Equilibrium of rights and obligations,

• Remedies for nullification or impairment of benefits,

• Commitments of trading partners to progressively reduce tariffs.

• Binding of tariffs

• Prohibition of quantitative restrictions

• Tariff negotiations: progressive reduction in protection

• Emergency import measures: safeguards

• Tariff renegotiations: compensation