1. What does MFN mean?
Under the World Trade Organization (WTO), the “Most Favoured Nation” (MFN) obligation is based on the principle that countries cannot normally discriminate between their trading partners.
With regard to tariffs, a country’s MFN tariff rate is generally applicable to imports from all countries, regardless of their origin. When a Free Trade Agreement (FTA) is in place, preferential tariff rates will apply to imported goods provided the goods meet the rules of origin of the FTA. The MFN tariff rates will apply to goods imported that do not meet the rules of origin (non-originating goods) under the FTA.
2. The rate under the FTA is higher than the MFN rate; how should I interpret this?
Each Free Trade Agreement (FTA) contains provisions to ensure that goods will benefit from the most advantageous tariff. Here is an example of such a provision:
Each country shall apply to an originating good the lesser of:
- The tariff rate applicable under its FTA tariff schedule; or
- The most-favoured-nation (MFN) applied tariff rate.
3. Why is it that the graph I get is only showing a 3-year or 5-year forecast?
When the tariff rate for a specific tariff line is reduced over a certain period of time and reaches a level that will be the same for every subsequent year, the tool displays only two additional years from that point.
When all tariffs are fully phased-out, meaning there is no further reduction of tariffs, the tool displays the final fixed rate for a five-year period.
Under an FTA, once tariffs have been fully eliminated, the tariff rate will remain at zero for every subsequent year.
4. Why is it that sometimes I get a graph and sometimes I don’t?
The tool provides a graph only when the tariff is applied in the form of a percentage.
5. I conducted a search with my 8-to 10-digit HS code and I got the results for the 6-digit HS code. Why is that?
The 8-to 10-digit HS codes (tariff line) may vary for the same product in different countries. The tool returns the search at the standardized 6-digit level to allow you to evaluate which tariff line best corresponds to your product in a specific country.