Consider the following statements with reference to principles of World Trade Organisation (WTO):
1. The member states can give special treatment to another under the Most Favoured Nations clause.
2. The member states cannot selectively choose WTO’s agreements to join.
Which of the statements above is/are correct ?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Explanation Statement 1 is not correct: The Most Favoured Nations clause may suggest a special treatment, but in the WTO, it means non-discrimination, treating virtually everyone equally, meaning the member countries cannot normally discriminate between their trading partners. If a country improves the benefits that it gives to one trading partner, it has to give the same “best” treatment to all the other WTO members so that they all remain “most-favoured”.
Statement 2 is correct: The WTO operates under a "single undertaking" principle, meaning that all member states must accept and abide by all of the WTO's multilateral agreements as a package. Members cannot selectively choose which agreements they wish to adhere to. They must either accept all the agreements or not join the WTO at all. This is crucial for the integrity and universality of the WTO's rules.
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