INTRODUCTION

Non-discrimination is a key concept in WTO law and policy. As already noted in chapter 1, there are two main principles of non-discrimination in WTO law: the most-favoured-nation (MFN) treatment obligation and the national treatment obligation. In simple terms, the MFN treatment obligation prohibits a country from discriminating between other countries; the national treatment obligation prohibits a country from discriminating against other countries. This chapter examines these two principles of non-discrimination as they apply to trade in goods and trade in services.

Discrimination between, as well as against, other countries was an important characteristic of the protectionist trade policies pursued by many countries during the Great Depression of the 1930s. Historians now regard these discriminatory policies as an important contributing cause of the economic and political crises that resulted in the Second World War. Discrimination in trade matters breeds resentment among the countries, manufacturers, traders and workers discriminated against. Such resentment poisons international relations and may lead to economic and political confrontation and conflict. In addition, discrimination makes scant economic sense, generally speaking, since it distorts the market in favour of products and services that are more expensive and/or of a lower quality. Eventually, it is the citizens of the discriminating country that end up ‘paying the bill’ for the discriminatory trade policies pursued.

The importance of eliminating discrimination in the context of the WTO is highlighted in the Preamble to the WTO Agreement, where the ‘elimination of discriminatory treatment in international trade relations’ is identified as one of the two main means by which the objectives of the WTO may be attained.