injury) to its own domestic industry. This is a substantial difference from all other WTO-authorized import restrictions, which require some evidence and impose a nontrivial resource and political cost on a country seeking to limit the market access previously granted to another WTO member.<sup>5</sup> This policy is based on the now codified provision that there _exists_ a substantial threat that one country’s China safeguard will deflect Chinese exports to a third market.

Thus far, the most public battles over use of the new China safeguard focused on the U.S. imposing a new 35% tariff on imported Chinese tires in September 2009, and the U.S. and EU using its auspices to negotiate Chinese voluntary export restraints on fairly traded imports of textile and clothing products in 2005. Nevertheless, data collected from the WTO and reported in Bown (2010a) indicate that at least ten different WTO members initiated investigations under the new China-safeguard policy between 2002 and 2009, with at least six of those countries imposing new trade barriers on products as varied as float glass, polyvinyl chloride, and porcelain tiles (Turkey); tires (U.S.); soda ash and aluminum (India); as well as textiles and clothing products (U.S., EU, Peru and Colombia).<sup>6</sup> In the midst of the global financial crisis in 2009, India alone initiated five different investigations under its China-safeguard policy. And an examination of countries with relatively transparent import policy governance such as Canada (CITT, 2007) and the U.S. (ITC, 2007) indicates that WTO members were quick to include the “trade deflection” provision into their domestic implementing legislation thus making it readily accessible for competing industries and policymakers seeking a new trigger to limit Chinese exports.<sup>7</sup> Is there historical evidence that discriminatory trade restrictions imposed on China have disrupted

> 5The standard safeguard investigation requires evidence of injury (or threat thereof) caused by increased imports. Antidumping (countervailing duty) investigations also require evidence of less than fair value pricing (illegal export subsidies) in addition to the evidence of injury caused by imports. For a discussion of the general role of safeguards in the WTO, see Hoekman and Kostecki (2009).

> 6Bown (2010b) provides a more detailed discussion of China-specific safeguard use between 2002 and 2006, including the 2005 voluntary export restraints that the U.S. and EU negotiated over Chinese textile and apparel. The ten economies that reported to the WTO that they initiated investigations between 2002 and 2009 are Canada; Colombia; Ecuador; EU; India; Peru; Poland; Taiwan, China; Turkey; and the U.S. Note that the number of initiated investigations in the data is a lower bound due to lax WTO notification requirements - i.e., because Article 16 of China’s WTO Accession Protocol does not require members to notify the WTO of the initiation of investigations, some investigations that did not result in new trade barriers (which must be notified to the WTO) may not have been reported. Furthermore, as stipulated under paragraph 241 of the Working Party Report on the Accession of China (WTO document WT/MIN(01)/3), the separate China-specific _textile_ safeguard instrument available to WTO members until 2008 had no notification obligation whatsoever. This explains why the U.S. and EU China-specific textile safeguard cases in 2005 were not reported to the WTO and are not included in Bown (2010a).

> 7For the U.S., see ‘Section 422: China Trade Diversion Investigations’ of the U.S. Trade Act of 1974, and for Canada, see ‘Safeguard Inquiry: Trade Diversion Imports from China’ of the Canadian International Trade Tribunal Act.

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