economies are in 6-digit HS product categories that have become subject to new investigations initiated since 1Q 2008. Table 4 also indicates that developed countries such as Canada and Australia not only have a much smaller level of trade potentially affected, but the targeted imports measured as a share of their total imports is much smaller than the U.S. and EC as well.

The data for some of the developing economy users of these trade remedies is a bit more worrisome. India, the most frequent user of these trade remedies (table 1), is estimated to have $3.9 billion in 2007 imports that have been subject to new trade remedy investigations during the crisis thus far – 1.8 per cent of its total 2007 imports. China (0.64 per cent), Argentina (0.7 per cent) and Turkey (0.8 per cent) are other examples of countries whose share of their total 2007 imports being subject to new import restrictions during the crisis is greater share than that of the U.S. and EC. China is an interesting case because while its underlying frequency of cases has been limited during the crisis (only 8 new product-level initiations since 1Q 2008), the investigations collectively covered a relatively sizable level of 2007 imports ($6.2 billion).

Before moving to relative comparisons of the data, it is worth noting that there are at least three reasons to speculate that the table 4 estimates on the size of value of imports affected by crisis use of trade remedies thus far are likely to provide an _upper bound_ on the total size of imports affected by these trade remedy initiations: 1) the trade data is matched to the trade remedy data at the 6-digit HS level, and in practice many countries impose trade remedies at the 8- or 10- digit HS level, thus not affecting all sub-products within a given 6-digit category; 2) not all of these newly initiated investigations will result in imposed measures;<sup>11</sup> and 3) imports in 2008 and 2009 may fall from their pre-crisis (2007) levels for reasons unrelated to trade remedies but instead because of other (demand side income effects or supply side credit constraints) shocks associated with the crisis.<sup>12</sup> Next, table 4 also reveals how the potential economic impact of the trade remedy use during the crisis period may affect China’s exports differentially depending on the using country. Of the combined imports targeted by these eleven other economies use of trade remedies since the crisis, 58.9 per cent of those targeted imports derived from China’s exporters alone. On a country-by-country basis, this ranged from more than 90 per cent of the imports subject to investigations in the U.S. and Canada, to only 31 per cent in Mexico and less than 15 per cent of the imports targeted by Turkey’s use of new trade remedies.

> 11 Nevertheless, research such as Staiger and Wolak (1994) has shown that the mere harassment of initiations can have an adverse effect on trade flows, even in cases in which definitive trade restrictions are not imposed.

> 12 Furthermore, the likelihood of trade diversion (Prusa 1997, 2001; Konings, Vandenbussche and Springael 2001; Bown 2004) with the discriminatory application of these trade remedies indicates that even some of the imports destroyed by the imposition of new trade barriers (from the named sources, what we have used to construct table 4) will result in increased imports of the same product from non-named foreign sources.

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