GATT, which was signed in 1947, is a multilateral agreement regulating trade among about 150 countries whose purpose is to achieve “the substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis.” The Uruguay round resulted in an agreement among 117 countries to reduce trade barriers and to create more comprehensive and enforceable world trade rules. This agreement created the World Trade Organization (WTO), which came into being on January 1, 1995. The WTO implements the agreement, provides a forum for negotiating additional reductions of trade barriers and for settling policy disputes, and enforces trade rules. Until the establishment of the WTO, GATT functioned de facto as an organization, conducting rounds of talks addressing various trade issues and resolving international trade disputes. (Lash, 1999. WTO Online, 2007)
The WTO is tasked to ensure that countries do not employ trading measures that would place other countries at the losing end. Countries cannot normally discriminate between their trading partners. Grant someone a special favor (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members. Some exceptions are allowed. For example, countries can set up a free trade agreement that applies only to goods traded within the group —  . discriminating against goods from outside. In general, MFN means that every time a country lowers a trade barrier or opens up a market, it has to do so for the same goods or services from all its trading partners — whether rich or poor, weak or strong.
Imported and locally-produced goods should be treated equally — at least after the foreign goods have entered the market. The same should apply to foreign and domestic services, and to foreign and local trademarks, copyrights and patents.