Legal Definitions - favored nation

Definition: Favored nation refers to a treaty status granted to a nation, usually in international trade, allowing it to enjoy the same privileges that the other party accords to other nations under similar circumstances. This status primarily results in lower trade tariffs.

Example: If Country A grants most favored nation status to Country B, it means that Country B will receive the same trade benefits as any other country that Country A has granted the same status to. For instance, if Country A has granted a 10% tariff reduction to Country C, then Country B will also receive the same 10% tariff reduction.

Explanation: The example illustrates how favored nation status works in international trade. It means that a country that has been granted this status will receive the same treatment as other countries that have been granted the same status. This status is usually granted to promote fair trade practices and to encourage countries to engage in trade with each other.