<P> After World War II, tariff and trade agreements were negotiated simultaneously by all interested parties through the General Agreement on Tariffs and Trade (GATT), which ultimately resulted in the World Trade Organization in 1995 . The World Trade Organization requires members to grant one another "most favoured nation" status . A "most favoured nation" clause is also included in the majority of the numerous bilateral investment treaties concluded between capital exporting and capital importing countries after World War II . </P> <P> Trade experts consider MFN clauses to have the following benefits: </P> <Ul> <Li> Increases trade creation and decreases trade diversion . A country that grants MFN on imports will have its imports provided by the most efficient supplier if the most efficient supplier is within the group of MFN . Otherwise, that is, if the most efficient producer is outside the group of MFN and additionally, is charged higher rates of tariffs, then it is possible that trade would merely be diverted from this most efficient producer to a less efficient producer within the group of MFN (or with a tariff rate of 0). This leads to economic costs for the importing country, which can outweigh the gains from free trade . </Li> <Li> MFN allows smaller countries, in particular, to participate in the advantages that larger countries often grant to each other, whereas on their own, smaller countries would often not be powerful enough to negotiate such advantages by themselves . </Li> <Li> Granting MFN has domestic benefits: having one set of tariffs for all countries simplifies the rules and makes them more transparent . Theoretically, if all countries in the world confer MFN status to each other, there will be no need to establish complex and administratively costly rules of origin to determine which country a product (that may contain parts from all over the world) must be attributed to for customs purposes . However, if at least one nation lies outside the MFN alliance, then customs cannot be done away with . </Li> <Li> MFN restrains domestic special interests from obtaining protectionist measures . For example, butter producers in country A may not be able to lobby for high tariffs on butter to prevent cheap imports from developing country B, because, as the higher tariffs would apply to every country, the interests of A's principal ally C might get impaired . </Li> </Ul> <Li> Increases trade creation and decreases trade diversion . A country that grants MFN on imports will have its imports provided by the most efficient supplier if the most efficient supplier is within the group of MFN . Otherwise, that is, if the most efficient producer is outside the group of MFN and additionally, is charged higher rates of tariffs, then it is possible that trade would merely be diverted from this most efficient producer to a less efficient producer within the group of MFN (or with a tariff rate of 0). This leads to economic costs for the importing country, which can outweigh the gains from free trade . </Li>

Where is a most-favored-nation clause most likely to appear