the relative levels of exporter-received prices; i.e., prices (unit values) for the respondent’s imports of the disputed products from different exporting countries.<sup>11, 12</sup> Our second set of variables characterize how these bilateral trade indicators change alongside the timing of the respondent country’s imposition of an allegedly WTO-violating policy. Before describing the construction of these _change_ variables, we define the critical year around which we choose to benchmark these changes, and we describe the logic behind this choice.

We make two arguments that the critical year of interest for our exercise is the year of the imposition of the allegedly WTO-inconsistent policy rather than the year in which the complainant initiates the WTO dispute.<sup>13</sup> First, the imposition of a WTO-inconsistent policy may immediately begin to distort the conditions of competition and market access for the disputed product. Second, attempts to attribute changes in market access conditions – e.g., import market shares, values, volumes, or prices – associated with the changes in the policy under dispute should be timed with the application of the policy itself because the timing of the initiation of the dispute may be determined by a number of other factors.

The first question raised by this particular timing characterization is how to handle the 68 ‘no policy change’ disputes. These are disputes for which the allegation is not that the respondent implemented a new WTO-inconsistent policy, but that the respondent failed to reform a policy that was no longer consistent with the new obligations taken on by joining the WTO. Our approach is to proceed in two steps. First, we report information from the year prior to the initiation of the WTO dispute on the market access at stake in this particular subsample of the caseload. However, we argue that even these 11 We define unit values as the ratio of the constant dollar value of disputed imports to the volume of disputed imports, with volume data defined in kilograms from UN Comtrade made available via WITS. In order to make this variable meaningful across disputes that have different products, we report these bilateral data relative to the average unit value of imports for the disputed products. As a specific example, let Mijk (Vijk) be respondent _i’_ s volume (value) of imports of disputed product _k_ from exporting country _j_ . We then define the relative unit value between _i_ and _j_ of product _k_ as pijk ≡�Vijk⁄Mijk���∑V� j ijk��∑M� j ijk��. In the analysis below, we use this variable to describe potential differences in the price of respondent imports when exporting country _j_ is the complainant versus when exporting country _j_ is an interested third party or even a non-participant in the formal dispute. 12 Note that because trade volumes are not always reported in the HS-06 data from UN Comtrade, we are able to calculate unit values for only 84 percent of our sample of disputes alleging newly imposed policies. Logit-based tests suggest that missing volume data may not be randomly distributed across 2-digit HS Chapter, with products from the stone and glassware HS sections, for example, being more likely than others to have missing data on volumes. However, this should not bias our results given that only five of the 308 disputes in our sample involved these products. Similar tests for potential differences of availability of volume data across different respondent (importing) countries reveal no evidence of bias.

13 The timing distinction matters empirically as in two-thirds of the disputes these two years are not the same; one quarter of the disputes in our sample are filed one to two years after the actual violation has occurred, while other disputes are filed as many as 18 years after the alleged violation.

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