The Most-Favored-Nation Clause as a Bar to Economic Union

The nations of the world are on the brink of economic suicide. An immediate and drastic stock-taking of international trade conditions, envisaging a volte-face in world commercial policies is one of the imperative requisites for any possible recovery. Out of the morass and hopeless tangle of the myriad problems presented by such an undertaking rises the question of the most-favored-nation clause in treaties, technical in its application, but vitally basic in its inception, meaning, and breadth of operation. A study of the clause is of far greater importance for a correct understanding of present day commercial policies and international economic relations than one would surmise from the very general knowledge of this subject on the part of most students of history, economies, and international relations, as well as on the part of the nations' leaders in public life. For this reason, the writer has deemed it worthwhile to make a study of its present position in the light of developments in post-war commercial policy with special reference to its European orientation. An attempt will be made to answer the questions: Is its maintenance as the regulator of international commercial intercourse still desirable in consideration of the European and world economic situation of today, or is its usefulness overshadowed by its shortcomings? An attempt will be made to show how and to what degree its existence has proven in recent years to be a bar to attempts at economic union and the ultimate establishment of a more liberal tariff policy: first, in Europe ; secondly, in the world at large.