is set equal to the MFN tariff, and in that way the impact of the first reduction in a preferential tariff will be captured. Moreover, when a country does not offer any preference in a given sector in years _t_ and _t_ – 1, we set the change in the preferential tariff to be zero, since a change in the MFN tariff in such case would _not_ be related to preferential tariff changes.

The data required for the applied MFN tariff component of the dependent variable, ∆τi−k , is taken from UNCTAD (TRAINS), the WTO, and is made available by the World Bank online via the World Integrated Trade Solution (WITS).

In our main specifications of interest, our measures of changes in levels of import protection, ∆τi−k and ∆Prefik, include not only the change in the MFN applied tariff and in the preferential tariff, respectively, but also the TTBs (AD and SG import restrictions) imposed against the rest of the world and the MERCOSUR partner. For example, if Argentina lowers its preferential tariff against Brazil under MERCOSUR but then it imposes AD or SG against Brazil on the same product, it is offsetting some of the tariff liberalization. Similarly, we assume that if Argentina (or Brazil) imposes an AD or SG duty against a non-MERCOSUR country, it reverses the MFN tariff cut that may have taken place subsequent to preferential liberalization. More precisely, if Argentina imposed any AD or SG import restrictions against Brazil during one of our sample periods, we consider it as a reversal of the preferential (tariff) liberalization implemented during that same period. The dependent variable is defined similarly. (See again Table 2.) The data on AD and SG import restrictions come from government sources from those countries, as described in the _Temporary Trade Barriers Database_ (Bown, 2015b).

Second, we adjust the baseline Estevadeordal et al. (2008) approach by examining changes in the variables defined as long differences. Long differences allow us to take into consideration the accumulation of a number of newly imposed TTBs that may have arisen over time, given that our main motivation is on the question of whether, at the ends of these periods, the accumulated effect was of a building block or stumbling block.<sup>20</sup> Specifically, the estimation sample uses the changes in bilateral import protection (potential preferential liberalization) taking place from 1990-2000, which we also split into two sub-periods: 1990-1994 and 1994-2000. The 1990-1994 period captures MERCOSUR as an FTA,

> 20 The Estevadeordal et al. (2008) approach involves a panel structure at the annual frequency. Since they are interested in exploiting the cross-country aspects of their data in ways that are less relevant for the questions under investigation here (which are focused on Argentina and Brazil), the higher frequency data allow them to utilize industry fixed effects. By examining long differences, we do not need to control for other determinants (e.g., macroeconomic shocks, trade volume shocks, political-economic shocks) that the literature has shown affect intertemporal variation in TTB use at higher frequencies. See, for example, the discussion in Bown and Crowley (forthcoming).

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