MOST FAVOURED NATION CLAUSE, in a commer cial treaty, an article which concedes to the State with which it is concluded whatever advantages in the matters comprised within its stipulations have been allowed to any foreign or third State. It does not in itself directly confer any particular rights, but sums up the whole of the rights in the matters therein mentioned which have been or may be granted to foreign countries. The value of the privileges under this article accordingly varies with the condi tions as to these rights in each State which concedes this treat ment.
Prior to 1778, a promise of most favoured nation treatment when granted was universally understood to mean a promise of treatment equal to the best which might be accorded to any other country, regardless of the terms under which special favours to other countries might be conferred. Owing to discriminations and exclusions by other countries, the United States found this inter pretation too wide. In their first commercial treaty, that with France of April 3o, 1803, Art. VIII. provided that "the ships of France shall be treated upon the footing of the most favoured nation in the ports of Louisiana." France accordingly claimed that the advantages granted to Great Britain in all ports of the United States should be secured to France in the ports of Louisiana. This claim was rejected by the United States upon the ground that the clause did not say and could not be understood to mean that France should enjoy as a free gift that which was conceded to other nations for a full equivalent. In the treaty of commerce between Great Britain and the United States of July 3, 1815, which took the place of the Jay Treaty of 1794, it was provided that "no higher or other duties shall be imposed on the importation into the territories of His Britannic Majesty in Europe of any ar ticles, the growth, produce or manufacture of the United States, and no higher or other duties shall be imposed on the importation of any articles, the growth, produce or manufacture of His Brit annic Majesty's territories in Europe, than are or shall be payable on the like articles, being the growth, produce or manufacture of any foreign country." Great Britain regarded this clause as uncon
ditional and maintained that if one of the parties in a treaty with a third power gave a lower tariff on any such articles, the other party was entitled also to be charged at the lower rate.
The American interpretation of the most favoured nation treat ment as being based on reciprocity, qualified by the power to make special arrangements with particular countries, has been upheld by the Supreme Court of the United States in Bartram v. Robert son, 122 U.S. 116, and Whitney v. Robertson, 124 U.S. 19o. The same conclusion was reached by the court of customs appeals as to concessions for reciprocal considerations made under s. 3 of the Tariff Act of 1897, in Shaw and Co. v. United States, I Ct. Cust. App. 426. The Court said, "S 3 of the Tariff Act 1897 was a general law : its attitude toward every nation was uni form. It offered no special favour to France or Germany or Italy or any other country. Every foreign nation was treated alike by the terms of the law. It was equally within the opportunity of England to negc tiate a reciprocity treaty as it was within the opportunity of France." This American interpretation is regarded by Oppenheim as unjustifiable (International Law, vol. I., p. 75o) and by Sir Thomas Barclay as resting on policy alone and no sound principle of law (Problems of International Law and Prac tice, p. 138). It is, however, approved by De Martens (Traitd de Droit International, vol. II., ss. 51-55), and by Westlake (Inter national Law, vol. I., p. 283). The opinions of De Martens and Westlake are to be preferred. The American interpretation rests upon a sound legal principle. The law looks to the intention of the parties to an agreement. Nations, like individuals, when they have granted mutual concessions for valuable considerations, do not usually intend to give the benefit of such concessions to third par ties for nothing. If they do, they usually take care to say so in express terms, and do not as a rule leave it to be inferred from a vague general stipulation. This is not only good law, but sound common sense.