first says that concessions made by a participating country in the course of the GATT is then automatically applicable to all participating countries of the GATT, that is to say that all countries must be treated equally.
The second means that domestic products on the home market of importing country and imported products from foreign markets must be treated in the same way. (C. Jepma, H. Jager, E. Kamphuis, 1996, pp.191).
However, many countries complained that the GATT was containing an important area of ambiguity, providing discrimination between GATT contracting countries. Although the GATT prohibits such discrimination, as an attack on the MNF principle, it allows some countries to operate preferential tariff arrangement, this, if such action leads to free trade between contracting countries (Paul R. Krugman, 2003, pp.243). Thus, Article XXIV of the General Agreement on Customs Unions and Free Trade points out that an exception to the principle of non-discrimination is made through the establishment of free trade areas or a customs union. (N. Grimwade, 2000, pp. 326).
In order to response to complaints from developing countries, saying that the non-discrimination principle was in fact discriminating against them, a Generalised System of Preferences (GSP) was introduced in 1968 for manufacturing goods imported from developing countries ( N. Grimwade, 2000, pp.323). In fact, in general, the GSP has particularly been in favour of countries already involved in a process of rapid industrialisation, that is to say developing countries (C. Jepma, H. Hager, E. Kamhuis, 1996, pp.193).
Some of the GATT contracting parties were also allowed to impose import restrictions in certain circumstances. Those restrictions take mostly the form of quantitative restrictions (QRs) on imports, especially on agricultural goods, and of quotas, most of the cases in order to correct a disequilibrium of balance payments (Article XII...