Ukraine and Canada have been the first countries to withdraw from Russia the so-called “Most Favored Nation” treatment, one of the fundamental principles of international trade overseen by the World Trade Organization (WTO), said diplomatic sources close to the institution. .
The European Union (EU) has announced its intention to proceed in the same way.
The status of Most Favored Nation exists to prevent the countries that make up the WTO (164) from discriminating between their various trading partners, so if a country is granted a special advantage – such as a tariff reduction on one of its products – the same has to be done with all the other members of the organization (with exceptions, as in the case of free trade agreements).
The importance of this principle is such that it is the first article of the General Agreement on Tariffs and Trade (GATT), which has regulated merchandise trade since 1994.
Russia’s invasion of Ukraine and the war that has broken out has led the latter country to inform the WTO in writing that it refuses to extend to Russia the benefits it offers to other countries, alleging reasons of national security.
Canada announced to the rest of the WTO countries that it would do the same and for the same reasons, but has not yet officially communicated its decision to the corresponding body.
In practice, this means that Ukraine, Canada and other countries that make the same decision will be able to tax imports (tariffs) from Russia at whatever level they wish, deny Russian firms access to their service markets and deny protection of their services. Intellectual Property Rights.
On the other hand, commercial sources indicated that no country has presented a direct proposal to exclude Russia from the WTO, a situation for which there is no precedent.
In the last two weeks’ meetings of the various WTO bodies, numerous countries have condemned the Russian invasion and expressed their support for Ukraine, to which the Russian delegation has reacted by pointing out that this forum is not the right one for such declarations.
The WTO rules do not establish any mechanism for the expulsion of a member state and the only way to do it would be by amending the agreements on the basis of which it works.
Source: Gestion
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