multilateral trade agreement

A multilateral trade agreement is a contractual arrangement between more than two states concerning their trade relationships. These agreements aim to reduce barriers to trade, such as tariffs and nontariff restrictions, thereby opening parties to the benefits of increased trade.1234

Key features of trade agreements often include:
* Reciprocity: Each party must gain from the agreement for it to be incentive-compatible.14
* Most-Favoured-Nation (MFN) Clause: This clause prevents a party from lowering trade barriers to one country without extending the same benefit to all other trading partners with MFN status.1
* National Treatment: This ensures that imported goods are treated no less favourably than domestically produced goods of the same type.1

The General Agreement on Tariffs and Trade (GATT), established after World War II, and its successor, the World Trade Organization (WTO), are significant institutions that have facilitated comprehensive multilateral trade agreements, leading to substantial reductions in world tariff levels and expansion of global trade.123