Final answer:
The three basic principles of the General Agreement on Tariffs and Trade (GATT) are trade without discrimination, protection through tariffs, and trade liberalization. GATT played a crucial role in promoting global trade by reducing barriers until it was superseded by the WTO in 1995.
Step-by-step explanation:
The General Agreement on Tariffs and Trade (GATT) established in 1947, was a multilateral agreement aiming to reduce trade barriers such as tariffs and promote trade between its member countries. While the agreement covers a broad range of trade rules, three basic principles formed the core of GATT:
- Trade without discrimination, which included the 'Most Favoured Nation' (MFN) principle, ensuring that any advantage given to one member must be extended to all other members.
- Protection through tariffs rather than through prohibitive measures such as quotas, allowing for predictable and transparent trade relations.
- The principle of trade liberalization, which emphasized negotiation for the reduction of tariffs and other trade barriers in a multilateral setting.
Despite its success in lowering tariffs and expanding trade, GATT was replaced by the World Trade Organization (WTO) in 1995, which now serves as the primary platform for governing international trade relations among its expanded membership.