What is National Treatment?

Legal 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.

While this is generally viewed as a desirable principle, in custom it conversely means that a state can deprive foreigners of anything of which it deprives its own citizens. An opposing principle calls for an international minimum standard of justice (a sort of basic due process) that would provide a base floor for the protection of rights and of access to judicial process. The conflict between national treatment and minimum standards has mainly played out between industrialized and developing nations, in the context of expropriations. Many developing nations, having the power to take control over the property of their own citizens, wished to exercise it over the property of aliens as well.

Though support for national treatment was expressed in several controversial (and legally non-binding) United Nations General Assembly resolutions, the issue of expropriations is almost universally handled through treaties with other states and contracts with private entities, rather than through reliance upon international custom.

National treatment only applies once a product, service or item of intellectual property has entered the market. Therefore, charging customs duty on an import is not a violation of national treatment even if locally produced products are not charged an equivalent tax.
-- Wikipedia
Legal Definition
A clause frequently included in bilateral investment treaties ("BITs") which provides that a host state shall treat foreign and domestic enterprises equally.
See also
Legal Definition
Non-discriminatory trade policy commitment. Infers that a government cannot treat foreign exporting firms any less favorably that its own local manufacturing firms. This was GATT, now WTO rules.