Definition
National treatment is a principle in international law vital to many treaty regimes. It essentially means treating foreigners and locals equally. Under national treatment, if a state grants a particular right, benefit or privilege to its own citizens, it must also grant those advantages to the citizens of other states while they are in that country. In the context of international agreements, a state must provide equal treatment to those citizens of other states that are participating in the agreement. Imported and locally produced goods should be treated equally — at least after the foreign goods have entered the market.
National Treatment
What is ‘National Treatment’
A concept of international law that declares if a state provides certain rights and privileges to its own citizens, it also should provide equivalent rights and privileges to foreigners who are currently in the country. This concept of equality can be found in bilateral tax treaties and also in most World Trade Organization agreements.
Explaining ‘National Treatment’
For example, if country A provides special tax breaks for its fledgling pharmaceutical industry, all pharmaceutical companies that have operations in country A will be entitled to the tax breaks, regardless of whether the company is domestic or foreign.
In some situations, national treatment may not be such a great thing. For instance, suppose that a state has a law that allows it to expropriate property. Under national treatment, a foreign firm would technically still be subject to the expropriation law. However, depending on the country, other laws may exists that could limit national treatment to only the upside benefits.
Further Reading
- Is national treatment still viable? US policy in theory and practice – ideas.repec.org [PDF]
- Public Goods for the Countryside, National Treatment for Farmers and the Development of Agriculture [J] – en.cnki.com.cn [PDF]
- An Analysis of National Treatment of Farmers and Instituti onal Ethic [J] – en.cnki.com.cn [PDF]
- The economics of alternative fuel reduction treatments in western United States dry forests: financial and policy implications from the National Fire and Fire Surrogate … – www.sciencedirect.com [PDF]
- Economic costs of drug abuse: Financial, cost of illness, and services – www.sciencedirect.com [PDF]
- New directions in water economics, finance and statistics – iwaponline.com [PDF]
- What Role for Non-Discrimination and Prudential Standards in International Financial Law? – academic.oup.com [PDF]
- A financial analysis of revision hip arthroplasty: the economic burden in relation to the national tariff – online.boneandjoint.org.uk [PDF]
- Health and economic benefits of public financing of epilepsy treatment in India: An agent‐based simulation model – onlinelibrary.wiley.com [PDF]
