National treatment in the context of "Expropriation"

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⭐ Core Definition: National treatment

National treatment is a principle in international law. Utilized in many treaty regimes involving trade and intellectual property, it requires equal treatment of foreigners and locals. Under national treatment, a state that grants particular rights, benefits or privileges to its own citizens 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 citizens of the other states participating in the agreement. Imported and locally produced goods should be treated equally — at least after the foreign goods have entered the market.

While this is generally viewed as a desirable principle, in custom it conversely means that a state can deprive foreigners of anything of which it deprives its own citizens. An opposing principle calls for an international minimum standard of justice (a sort of basic due process) that would provide a base floor for the protection of rights and of access to judicial process. The conflict between national treatment and minimum standards has mainly played out between industrialized and developing nations, in the context of expropriations. Many developing nations, having the power to take control over the property of their own citizens, wished to exercise it over the property of aliens as well.

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National treatment in the context of World Trade Organization

The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. Established on 1 January 1995, pursuant to the 1994 Marrakesh Agreement, it succeeded the General Agreement on Tariffs and Trade (GATT), which was created in 1948. As the world's largest international economic organization, the WTO has 166 members, representing over 98% of global trade and global GDP. It is headquartered in Geneva, Switzerland.

The WTO's primary functions are to provide a framework for negotiating trade agreements and to resolve trade disputes among its members. Its agreements, which are negotiated and signed by the majority of the world's trading nations and ratified in their parliaments, cover trade in goods, services, and intellectual property. The organization operates on the principle of non-discrimination—enshrined in the most-favoured-nation and national treatment provisions—but allows for exceptions for environmental protection, national security, and other objectives.

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National treatment in the context of Most favoured nation

In international economic relations and international politics, most favoured nation (MFN) is a status or level of treatment accorded by one state to another in international trade. The term means the country which is the recipient of this treatment must nominally receive equal trade advantages as the "most favoured nation" by the country granting such treatment (trade advantages include low tariffs or high import quotas). In effect, a country that has been accorded MFN status may not be treated less advantageously than any other country with MFN status by the promising country.

There is a debate in legal circles whether MFN clauses in bilateral investment treaties include only substantive rules or also procedural protections. The members of the World Trade Organization (WTO) agree to accord MFN status to each other. Exceptions allow for preferential treatment of developing countries, regional free trade areas and customs unions. Together with the principle of national treatment, MFN is one of the cornerstones of WTO trade law.

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