BROWSE

National Treatment

Definition

National treatment is a principle in international law vital to many treaty regimes. It essentially means treating foreigners and locals equally. Under national treatment, if a state grants a particular right, benefit or privilege to its own citizens, it must also grant those advantages to the citizens of other states while they are in that country. In the context of international agreements, a state must provide equal treatment to those citizens of other states that are participating in the agreement. Imported and locally produced goods should be treated equally — at least after the foreign goods have entered the market.

What is 'National Treatment'

A concept of international law that declares if a state provides certain rights and privileges to its own citizens, it also should provide equivalent rights and privileges to foreigners who are currently in the country. This concept of equality can be found in bilateral tax treaties and also in most World Trade Organization agreements.

Explaining 'National Treatment'

For example, if country A provides special tax breaks for its fledgling pharmaceutical industry, all pharmaceutical companies that have operations in country A will be entitled to the tax breaks, regardless of whether the company is domestic or foreign.

In some situations, national treatment may not be such a great thing. For instance, suppose that a state has a law that allows it to expropriate property. Under national treatment, a foreign firm would technically still be subject to the expropriation law. However, depending on the country, other laws may exists that could limit national treatment to only the upside benefits.


Further Reading


Is national treatment still viable? US policy in theory and practice
ideas.repec.org [PDF]
… It is the basis for commitments by the twenty-four countries belonging to the Organization for Economic Cooperation and … "Is national treatment still viable? US policy in theory and practice," International Finance Discussion Papers 385, Board of Governors of the Federal Reserve …

Public Goods for the Countryside, National Treatment for Farmers and the Development of Agriculture <span style=[J]' src='/thumbnails/?img=http%3A%2F%2Fen.cnki.com.cn%2FArticle_en%2FCJFDTotal-ZYCY200211017.htm' />Public Goods for the Countryside, National Treatment for Farmers and the Development of Agriculture [J]
en.cnki.com.cn [[J]' href='https:/api.miniature.io/pdf?url=en.cnki.com.cn%2FArticle_en%2FCJFDTotal-ZYCY200211017.htm'>PDF]
… It is the basis for commitments by the twenty-four countries belonging to the Organization for Economic Cooperation and … "Is national treatment still viable? US policy in theory and practice," International Finance Discussion Papers 385, Board of Governors of the Federal Reserve …

An Analysis of National Treatment of Farmers and Instituti onal Ethic <span style=[J]' src='/thumbnails/?img=http%3A%2F%2Fen.cnki.com.cn%2FArticle_en%2FCJFDTotal-ZLCJ200305005.htm' />An Analysis of National Treatment of Farmers and Instituti onal Ethic [J]
en.cnki.com.cn [[J]' href='https:/api.miniature.io/pdf?url=en.cnki.com.cn%2FArticle_en%2FCJFDTotal-ZLCJ200305005.htm'>PDF]
… It is the basis for commitments by the twenty-four countries belonging to the Organization for Economic Cooperation and … "Is national treatment still viable? US policy in theory and practice," International Finance Discussion Papers 385, Board of Governors of the Federal Reserve …

The economics of alternative fuel reduction treatments in western United States dry forests: financial and policy implications from the National Fire and Fire Surrogate …The economics of alternative fuel reduction treatments in western United States dry forests: financial and policy implications from the National Fire and Fire Surrogate …
www.sciencedirect.com [PDF]
… It is the basis for commitments by the twenty-four countries belonging to the Organization for Economic Cooperation and … "Is national treatment still viable? US policy in theory and practice," International Finance Discussion Papers 385, Board of Governors of the Federal Reserve …

Economic costs of drug abuse: Financial, cost of illness, and servicesEconomic costs of drug abuse: Financial, cost of illness, and services
www.sciencedirect.com [PDF]
… It is the basis for commitments by the twenty-four countries belonging to the Organization for Economic Cooperation and … "Is national treatment still viable? US policy in theory and practice," International Finance Discussion Papers 385, Board of Governors of the Federal Reserve …

New directions in water economics, finance and statisticsNew directions in water economics, finance and statistics
iwaponline.com [PDF]
… It is the basis for commitments by the twenty-four countries belonging to the Organization for Economic Cooperation and … "Is national treatment still viable? US policy in theory and practice," International Finance Discussion Papers 385, Board of Governors of the Federal Reserve …

What Role for Non-Discrimination and Prudential Standards in International Financial Law?What Role for Non-Discrimination and Prudential Standards in International Financial Law?
academic.oup.com [PDF]
… It is the basis for commitments by the twenty-four countries belonging to the Organization for Economic Cooperation and … "Is national treatment still viable? US policy in theory and practice," International Finance Discussion Papers 385, Board of Governors of the Federal Reserve …

A financial analysis of revision hip arthroplasty: the economic burden in relation to the national tariffA financial analysis of revision hip arthroplasty: the economic burden in relation to the national tariff
online.boneandjoint.org.uk [PDF]
… It is the basis for commitments by the twenty-four countries belonging to the Organization for Economic Cooperation and … "Is national treatment still viable? US policy in theory and practice," International Finance Discussion Papers 385, Board of Governors of the Federal Reserve …

Health and economic benefits of public financing of epilepsy treatment in India: An agent‐based simulation modelHealth and economic benefits of public financing of epilepsy treatment in India: An agent‐based simulation model
onlinelibrary.wiley.com [PDF]
… It is the basis for commitments by the twenty-four countries belonging to the Organization for Economic Cooperation and … "Is national treatment still viable? US policy in theory and practice," International Finance Discussion Papers 385, Board of Governors of the Federal Reserve …



Q&A About National Treatment


Which members of the World Trade Organization agree to accord each other with MFN status?

All members of the WTO agree to accord each other with MFN status. Exceptions allow for preferential treatment of developing countries, regional free trade areas and customs unions.

What does MFN mean?

Most Favoured Nation.

What does national treatment mean for multinational companies?

It means that foreign firms will receive benefits equal to those provided by domestic firms.

What is the definition of National Treatment?

The concept of international law that declares if a state provides certain rights and privileges to its own citizens, it also should provide equivalent rights and privileges to foreigners who are currently in the country.

Who must receive equal trade advantages as the most favoured nation?

The country granting such treatment (trade advantages include low tariffs or high import quotas).

What are some examples of MFN clauses in bilateral investment treaties?

There is a debate in legal circles whether MFN clauses include only substantive rules or also procedural protections.

How does National Treatment relate to bilateral tax treaties?

It can be found in bilateral tax treaties.

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