MFN (Most Favored Nation) Rate

The Most-Favored-Nation (MFN) rate is a non-discriminatory tariff treatment mutually granted among World Trade Organization (WTO) members, meaning that any preferential tariff granted by one member to any third party must be immediately and unconditionally extended to all other members. It generally applies to goods originating in WTO members or countries/regions with which the importing country has a bilateral MFN agreement. Usage scenario: determining the applicable tariff rate during import declaration; enterprises need to provide a certificate of origin to prove that the goods qualify for the MFN rate. Note: The MFN rate is not the lowest tariff rate; preferential rates under preferential trade agreements (such as RCEP, China-Australia FTA) may be lower. If the country of origin is not a WTO member or has not signed an MFN agreement with the importing country, the general tariff rate (usually higher) applies. Difference from the 'general tariff rate': The MFN rate is generally much lower than the general tariff rate but higher than the preferential tariff rate. Difference from the 'agreement tariff rate': The agreement tariff rate applies only to specific free trade agreement partners, while the MFN rate applies to all WTO members. Foreign trade practitioners should pay attention to rules of origin to choose the optimal tariff rate.