Which of the following lists correctly identifies the three basic principles of the General Agreement on Tariffs and Trade (GATT)?

• A. Free trade, monopolistic competition, price controls
• B. Non-discrimination, reciprocity, transparency
• C. Protectionism, quotas, subsidies
• D. Market equilibrium, consumer surplus, producer surplus

Answer: (B)

Verified step by step guidance

1. Understand that the General Agreement on Tariffs and Trade (GATT) is an international treaty aimed at promoting international trade by reducing trade barriers and establishing rules for fair trade.
2. Recall that the three basic principles of GATT are foundational concepts that guide how member countries interact in trade negotiations and practices.
3. Identify the principle of Non-discrimination, which means that countries should not discriminate between their trading partners (Most-Favored-Nation principle) and between imported and domestic goods (National Treatment principle).
4. Recognize Reciprocity, which refers to mutual concessions where countries agree to reduce tariffs or trade barriers in exchange for similar concessions from their trading partners.
5. Understand Transparency, which requires countries to publish their trade regulations and practices openly to ensure predictability and fairness in international trade.