National Treatment on Internal Taxation: Revisiting GATT Article III:2

The principle of non-discrimination which comprises national treatment and most-favored-nation (MFN) treatment is an important pillar of the multilateral trading system. The World Trade Organization (WTO) has separate disciplines on these two components with respect to the goods, services and intellectual property sectors. As to trade in goods, the MFN principle requires equal treatment of all WTO Members’ products, while the national treatment rule precludes discrimination between domestic and imported products. National treatment has a long history dating back to ancient Hebrew Law. It was introduced in various commercial agreements concluded in Europe in the Middle Ages, in a number of shipping treaties between European countries in the 17th and 18th centuries, and became quite a common part of many trade agreements since the late 19th century.1) National treatment appeared in the Havana Charter for an International Trade Organization and subsequently in the General Agreement on Tariffs and Trade (GATT) of 1947, though it started to play greater role in restraining protectionism in the 1980s when trade tariffs were substantially reduced.2)