of distinct trade policy settings, that market power motives can affect trade policy determination.<sup>6</sup> In particular, we utilize newly available data on inverse foreign export supply elasticities provided by Nicita, Olarreaga, and Silva (2015) to examine the theory that changes in Argentina’s import market power in particular – such as those that might arise due to the customs union with a larger trading partner (Brazil) – may have acted as the stumbling block channel discouraging additional MFN liberalization. We are able to provide only very weak evidence of this potential effect arising from our data. Nevertheless, we conclude in Section 6 with a potential institutional explanation behind this (non-) result by questioning the extent to which Argentina and Brazil really have formed a common external trade policy (that is jointly responsive to economic shocks), given that each country can (and does) implement its temporary trade barrier policies toward third countries independently from the other, thus resulting in substantial deviations from a common MFN tariff This paper contributes to a number of other literatures in empirical trade policy. First, it is one of only a handful of papers that has attempted to consider the interplay between TTBs (in particular, antidumping) and preferential trade agreement implementation. Notable papers from this literature include Blonigen (2005), which studied the impact of NAFTA on US antidumping use, and Prusa and Teh (2010) which provided a cross-country study of the effects of PTAs on the incidence of new antidumping import restrictions, finding they are increasing on PTA outsiders (relative to insiders) after implementation of the agreements.

This paper also contributes to a related literature on the intertemporal substitution of different trade policy instruments that may be arising due to a variety of different types of shocks. For example, Limão and Tovar (2011) study Turkey’s trade policy substitution away from tariffs and toward a broad class of non-tariff barriers in response to its accession to the WTO in 1995 and its formation of a customs union with the European Union. Bown and Tovar (2011) use the “exogenous” shock of India’s MFN tariff liberalization in the early 1990s to examine its policy of substitution toward antidumping and safeguards (TTBs) using the Grossman and Helpman (1994) protection for sale framework. Finally, a number of

> 6 Broda, Limão and Weinstein (2008) provided the first direct evidence that countries exploit their market power in trade when setting tariffs outside of GATT/WTO constraints. Their results indicate that even countries thought to be small (in GDP terms) can have some market power for certain products. Bagwell and Staiger (2011) find that countries that joined the WTO in 1995-2005 set their pre-accession tariffs in a way consistent with manipulation of their terms of trade. Ludema and Mayda (2013) find that the MFN tariffs that WTO members set in the Uruguay Round are consistent with the terms-of-trade hypothesis. Bown and Crowley (2013a) also provide evidence of the role of the terms-of-trade motive in the determination of time-varying trade policy through a study of US TTBs in use during 1997-2006. Bown (2015a) provides a survey of the empirical literature on this topic.

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