The effect of the most favored nation (normal trade relations) clause is to ?
Correct answer: C. maintain a nondiscriminatory structure of tariffs
- A. eliminate all tariffs between countries
- B. increase all tariffs between countries
- C. maintain a nondiscriminatory structure of tariffs
- D. maintain a discriminatory structure of tariffs
Explanation
Most-favored-nation treatment requires a country to apply the same trade terms, especially tariff rates, to all member countries rather than favoring one over another. It therefore creates a nondiscriminatory tariff structure, not tariff-free trade.
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