| most-fav·ored-na·tion (mōst'fā'vərd-nā'shən) adj. Of or relating to a commercial treaty in which the signatories agree to accord each other the same favorable terms that are offered in agreements with any other nation. |
Status in an international trading arrangement whereby agreements between two nations on tariffs are then extended to other nations. Every nation involved in such an arrangement will have most-favored-nation status. This policy is used, particularly by the United States, to lower tariffs, extend cooperative trading agreements, and protect nations from discriminatory treatment. Most-favored-nation agreements can also be used to apply economic pressure on nations by deliberately excluding them from international trade.