Most Favored Nation Clause Law and Legal Definition

A most favored nation clause is a term used in international economics and is often inserted in trade treaties. It is a level of status given to one country by another and enforced by the World Trade Organization. It is included in 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.

The clause accords all citizens of the nations that are parties to the treaty a special status as to other nations that are parties to the treaties. Such citizens are afforded all privileges available to most favored nations. [E. & J. Burke, Ltd. v. United States, 26 C.C.P.A. 374 (C.C.P.A. 1939)].