IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

How Different Are Safeguards from Antidumping? Evidence from US Trade Policies Toward Steel

  • Chad P. Bown

How do the trade impacts of a safeguard measure - which is statutorily designed to follow the most-favored-nation (MFN) principle - compare to explicitly discriminatory measures such as antidumping? We address this question empirically by examining the trade effects of the 2002 US safeguard on steel imports and comparing this with the impact of other US trade remedies on steel imports in the 1990s. We first estimate a fixed-effects model on a dynamic panel of product-level US steel imports over 1991-2003 and examine the potential discriminatory impact on foreign-produced steel of the 2002 “MFN†safeguard that used relatively new tools in the policymakers’ arsenal: country and product exclusions. A unique data set on the excluded products allows us to document the sizable impact on trade of both forms of preferential treatment. We also exploit higher-frequency data to examine potential differences in the timing of the foreign export response to policies of differential treatment. Using quarterly data, we find that while developed country exporters respond more quickly when granted an exclusion, the developing-country exporters’ response is more persistent. Finally, while we find the full effect of the 2002 safeguard policy with country and product exclusions to be quite discriminatory, our results also highlight an important similarity between safeguards and preferential trade agreements (PTAs). Relative to antidumping measures, country and product exclusions from a safeguard allow the protection-imposing country to target preferential treatment more effectively toward specific foreign countries, much like a PTA, or even more narrowly toward a specific foreign firm. Thus costly trade diversion could be an even greater concern with a safeguard than with explicitly discriminatory protection such as antidumping.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Our checks indicate that this address may not be valid because: 404 Not Found ( [301 Moved Permanently]--> If this is indeed the case, please notify (Christopher F. Baum)

File Function: main text
Download Restriction: no

Paper provided by Econometric Society in its series Econometric Society 2004 North American Summer Meetings with number 434.

in new window

Date of creation: 11 Aug 2004
Date of revision:
Handle: RePEc:ecm:nasm04:434
Contact details of provider: Phone: 1 212 998 3820
Fax: 1 212 995 4487
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Chad P. Bown & Meredith A. Crowley, 2011. "Import protection, business cycles, and exchange rates: evidence from the Great Recession," Working Paper Series WP-2011-16, Federal Reserve Bank of Chicago.
  2. Gary Clyde Hufbauer & Ben Goodrich, 2003. "Next Move in Steel: Revocation or Retaliation?," Policy Briefs PB03-10, Peterson Institute for International Economics.
  3. Kyle Bagwell & Robert W. Staiger, 2011. "What Do Trade Negotiators Negotiate About? Empirical Evidence from the World Trade Organization," American Economic Review, American Economic Association, vol. 101(4), pages 1238-73, June.
  4. Konings, Jozef & Springael, Linda & Vandenbussche, Hylke, 2001. "Import Diversion under European Antidumping Policy," CEPR Discussion Papers 2785, C.E.P.R. Discussion Papers.
  5. Kyle Bagwell & Robert W. Staiger, 1997. "An Economic Theory of GATT," NBER Working Papers 6049, National Bureau of Economic Research, Inc.
  6. Wilfred J. Ethier, 2004. "Political Externalities, Nondiscrimination, and a Multilateral World," Review of International Economics, Wiley Blackwell, vol. 12(3), pages 303-320, 08.
  7. Thomas J. Prusa, 1996. "The Trade Effects of U.S. Antidumping Actions," NBER Working Papers 5440, National Bureau of Economic Research, Inc.
  8. Benjamin H. Liebman & Kasaundra M. Tomlin, 2006. "Steel Safeguards and the Welfare of U.S. Steel Firms and Downstream Consumers of Steel: A Shareholder Wealth Perspective," The Institute for International Integration Studies Discussion Paper Series iiisdp144, IIIS.
  9. Bruce A. Blonigen & Wesley W. Wilson, 2005. "Foreign Subsidization and Excess Capacity," NBER Working Papers 11798, National Bureau of Economic Research, Inc.
  10. Bruce A. Blonigen & Thomas J. Prusa, 2001. "Antidumping," NBER Working Papers 8398, National Bureau of Economic Research, Inc.
  11. Bagwell, Kyle & Staiger, Robert W, 1997. "Multilateral Tariff Cooperation during the Formation of Free Trade Areas," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 291-319, May.
  12. Bruce Blonigen & Benjamin Liebman & Justin Pierce & Wesley Wilson, 2010. "Are All Trade Protection Policies Created Equal? Empirical Evidence for Nonequivalent Market Power Effects of Tariffs and Quotas," Working Papers 10-27, Center for Economic Studies, U.S. Census Bureau.
  13. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  14. Thomas J. Prusa, 2001. "On the spread and impact of anti-dumping," Canadian Journal of Economics, Canadian Economics Association, vol. 34(3), pages 591-611, August.
  15. Chad P. Bown & Meredith A. Crowley, 2003. "Trade deflection and trade depression," Working Paper Series WP-03-26, Federal Reserve Bank of Chicago.
  16. Kyle Bagwell & Robert W. Staiger, 1989. "A Theory of Managed Trade," Discussion Papers 801, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  17. Bown, Chad P., 2002. "Why are safeguards under the WTO so unpopular?," World Trade Review, Cambridge University Press, vol. 1(01), pages 47-62, March.
  18. Meredith A. Crowley, 2004. "The worldwide spread of antidumping protection," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Jan.
  19. Davis, Steven J & Haltiwanger, John C, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 819-63, August.
  20. Robert Staiger & Frank Wolak, 1994. "Measuring Industry Specific Protection: Antidumping in the United States," International Trade 9410004, EconWPA.
  21. Bagwell, Kyle & Staiger, Robert W., 2004. "Multilateral trade negotiations, bilateral opportunism and the rules of GATT/WTO," Journal of International Economics, Elsevier, vol. 63(1), pages 1-29, May.
  22. Chad P. Bown & Meredith A. Crowley, 2013. "Self-Enforcing Trade Agreements: Evidence from Time-Varying Trade Policy," American Economic Review, American Economic Association, vol. 103(2), pages 1071-90, April.
  23. Levy, Philip I, 1997. "A Political-Economic Analysis of Free-Trade Agreements," American Economic Review, American Economic Association, vol. 87(4), pages 506-19, September.
  24. Durling, James P. & Prusa, Thomas J., 2006. "The trade effects associated with an antidumping epidemic: The hot-rolled steel market, 1996-2001," European Journal of Political Economy, Elsevier, vol. 22(3), pages 675-695, September.
  25. Christian Broda & Nuno Limao & David E. Weinstein, 2008. "Optimal Tariffs and Market Power: The Evidence," American Economic Review, American Economic Association, vol. 98(5), pages 2032-65, December.
  26. Benjamin H. Liebman & Kasaundra M. Tomlin, 2008. "Safeguards and Retaliatory Threats," Journal of Law and Economics, University of Chicago Press, vol. 51(2), pages 351-376, 05.
  27. BOWN, CHAD P. & McCULLOCH, RACHEL, 2003. "Nondiscrimination and the WTO Agreement on Safeguards," World Trade Review, Cambridge University Press, vol. 2(03), pages 327-348, November.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ecm:nasm04:434. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.