variable as the percent change in the real bilateral exchange rate between the foreign and local currency, so that an increase indicates an _appreciation_ of the local (policy-imposing economy’s) currency.<sup>13</sup> The domestic unemployment variable is defined as the level change in the domestic unemployment rate. Our focus on unemployment follows Irwin (2005); in robustness checks we use domestic real GDP growth in lieu of unemployment and find that temporary trade barriers are typically more responsive to domestic unemployment changes than to real GDP growth.

The third innovation that we stress in our panel data approach is to focus on bilateral relationships between policy-imposing economies _j_ and their key trading partners _i_ .<sup>14</sup> This is potentially important for two reasons. First, industrialized economies frequently impose import restrictions through temporary trade barriers bilaterally.<sup>15</sup> Furthermore, we wish to examine whether import protection is applied against trading partners that are experiencing negative economic shocks at home. Thus a modeling approach that considered only the use of import protection aggregated over trading partners may not accurately capture the importance of bilateral shocks.

Table 1 presents summary statistics for the quarterly data used in the empirical analysis. The Appendix provides more information on the underlying sources of the data.

13 To coincide with the introduction of the euro in 1999, the estimates for the EU are based on a panel of data beginning only in 1999:Q1. Furthermore, there are a number of other issues associated with variable construction for the EU over this time period that merit discussion. The EU underwent a sizeable membership expansion during the period 1999-2010 – from 15 countries at the beginning of the period to 27 by the end of the sample. Once a country becomes a member of the EU it can no longer be targeted by EU antidumping, safeguard, or countervailing duty policies – as such, 12 countries that were significant EU trading partners (and hence potential antidumping targets) in 1999 cannot be included in the sample because they were part of the EU by 2007. Furthermore, the expanding membership means the definition of the economies comprising domestic employment and being subject to a common EU exchange rate are changing over time, which creates potential additional issues of measurement error.

14 The Appendix provides a list of the fifteen trading partners included for each of the five policy-imposing economies’ bilateral relationships. These trading partners cumulatively account for the source of 75 percent (EU) to 94 percent (Canada) of each policy-imposing economy's non-oil imports during the sample periods. We condition on trading partners targeted by TTBs because non-targeted trading partners would be dropped from the estimation given the nature of the included country fixed effects.

15 Even in the case of the application of global safeguards – which are supposed to be applied on a nondiscriminatory basis against all import sources of a product – economies typically apply them in a discriminatory fashion to exclude PTA partners or some developing countries. For a discussion, see Bown and McCulloch (2003). The construction of the policy variables in our bilateral panel data set only counts global safeguards against trading partners that were included in the policy.

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