Proposals to 'update' the Most-Favoured-Nation principle may weaken the multilateral trading system for developing countries. Critically analyse in the context of consensus, S&DT and the stalled WTO dispute settlement system.

GATT Article I sets out the Most-Favoured-Nation (MFN) principle. Under it, any advantage a member gives one country must be extended "immediately and unconditionally" to all members [2]. "Updating MFN" was a formal agenda item at the G20 Trade Ministers' Meeting in Milwaukee (2026). India defended MFN because it gives "the same terms for the smallest trader and the largest trader" [1]. Reform has some logic. But in today's weakened WTO, it would hurt developing countries the most.

The case for updating MFN

• Free-riding: under unconditional MFN, members can benefit from others' liberalisation without making commitments of their own. This slows negotiations.
• Hidden subsidies: India itself accepts that trade-distorting support in some economies leads to dumping and predatory pricing [1]. Current rules have not stopped this.

Consensus at risk

• Conditional or plurilateral MFN would let a few members write rules that others must later accept. That bypasses consensus, the main lever smaller members have, and India wants it kept [1].
• Without MFN, small economies would have to bargain one-to-one, where they have the least power.

S&DT at risk

• Special and differential treatment rests on the Enabling Clause, which is a legal exception to Article I:1 [2]. Redefining MFN could reopen that exception.
• India has warned that supply-chain diversification must not shift "the cost of adjustment onto developing countries" [1].

Dispute settlement already stalled

• The Appellate Body has not been able to hear appeals since December 2019, because the US blocked new appointments [3][4].
• More than 20 panel rulings have been "appealed into the void" [3]. The MC12 goal of a working system by 2024 was missed [4].
• The interim MPIA covers only the 24 members and the EU that have joined it [3]. If MFN is weakened while there is no appeal court, unilateral measures go unchecked. Developing countries then cannot enforce their rights.

Assessment

• India's stand is correct on method: restore the two-tier system and keep consensus and S&DT [1]. But it is defensive. It says more about what should not be done than about how to deal with subsidies.

The MFN debate reflects real problems: free-riding and distorting subsidies. The fix, however, should not dismantle non-discrimination. The order matters. First restore two-tier dispute settlement and protect S&DT and consensus. Then pursue subsidy transparency within existing WTO bodies. The UK's 2027 G20 Presidency gives India a chance to put forward such a proposal [1]. This would keep the trading system rules-based and non-discriminatory, in line with SDG 17.10.