ABSTRACT
This chapter explores China's first loss in the World Trade Organisation (WTO). And lose it did, at both the Panel and Appellate Body stage, on all the claims that mattered. The advocates for including China in the WTO urged that by making China a member, the international rule of law would circumscribe China's trade behavior. China's appellate argument was that the Panel failed to take into account General Rule of Interpretation 2(a)–the Doctrine of the Entireties, as it is known in US customs law. The General Agreement on Tariffs and Trade Golden Rule would be an international legal obligation incumbent on China to eschew viewing its domestically produced merchandise better than foreign competitors. The China Auto Parts case is a minor part in a far larger drama at play inside China. The Auto Parts case was China's first lesson via adverse litigation as to what the Golden Rule of trade means in practice as well as theory.
