safeguard policy is generally thought to result in MFN protection through nondiscriminatory treatment of imports, irrespective of the source country.<sup>2</sup> The purpose of this paper is to investigate empirically one element concerning the relative substitutability of the antidumping and safeguards TTB policy instruments. We provide an econometric examination of the differential trade effects that were associated with the discriminatory treatment across export sources for the steel product categories that were affected by the 2002 US safeguard and compare them to trade effects that were associated with steel imports that were affected by US antidumping policy. We construct a panel of bilateral, product-level US steel import data that include products that were affected and unaffected by these policies, covering the period 1989-2003.<sup>3</sup> Our specific empirical approach is to match the disaggregated import data to detailed information on TTB policies that is now available in the World Bank’s _Temporary Trade Barriers Database_ (Bown, 2012). For the 2002 steel safeguard, however, we also need to match import data to a number of different forms of policy _exclusions_ that arose both at the trading partner level and at the level of specific products that were tied to particular foreign firms. The information on this last set of policy exclusions has been compiled subsequently into a unique data set that derives directly from firm-specific petitions that were filed with the US Department of Commerce.

Our econometric results confirm that application of the 2002 steel safeguard policy is associated with differential trade impacts across the sources of US imports. Furthermore, we show how this impact on trade is similar to the differential trade effects of the more explicitly discriminatory protection that the US steel industry received under antidumping in earlier data that date to the late 1980s. Our evidence on antidumping is consistent with results from Prusa (1997, 2001), who uses a related approach to document

> 2 This is not the only potentially important distinction between SG and AD/CVD. In addition to the issue of “fair” versus “unfair” trade, the US AD/CVD process is bureaucratic while safeguards allow for Presidential discretion; the injury threshold is higher for SG cases; the duration of safeguards is shorter than is true of AD/CVD; and the use of SG can require compensation to affected countries, while AD/CVD does not. For a discussion, see Bown (2002). From a second-best perspective that takes the implementation of some import protection as given, the MFN application of a safeguard is one frequent justification that economists give generally to advocate use of SG over AD/CVD. The alternative use of AD and CVD allows for discrimination across export sources which would be more likely to result in _trade diversion_ : to importers’ switching to the sourcing of products to higher cost (but nontargeted) foreign producers, thus inducing the welfare losses to the domestic economy that were initially identified by Viner (1950). Krishna (2004) surveys the literature, focusing on different theoretical elements of the interaction between preferential and multilateral policy under trade agreements more generally.

> 3 During 1992-1993 in particular, the US steel industry filed a large number of antidumping (and countervailing duty) petitions that resulted in investigations and the application of new import restrictions. The full coverage of imports that were associated with these cases collectively rivaled the size of the 2002 US steel safeguard. Our econometric approach described below allows us to examine the potential similarities of the impact of the implementation of these different policy instruments across these different time periods.

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