restraint with China for the 2005–2008 period.<sup>24</sup> Although the rules of the WTO preclude use of VERs, as we describe in more detail below, this policy tool nonetheless returned, as before in the context of one major player seeking to slow the export expansion of another major trading partner.<sup>25</sup>

# _3.2. U.S. antidumping against Japan and China_

Antidumping (AD) is a second policy tool the United States has used to slow the expansion of Japanese and Chinese exports into the U.S. market. Japan and China together faced a major share of all U.S. antidumping activity over the 1979–2008 period; 25% of all U.S. antidumping investigations targeted either Japanese or Chinese producers, and 33% of all U.S. antidumping measures imposed targeted either Japanese or Chinese exports.<sup>26</sup> However, as Figure 2 indicates, U.S. use of antidumping over 1979–2008 is really made up of two distinct episodes: the rise (1979–1988) and fall (1989–2008) of antidumping use to manage the growth of Japan’s exports to the United States, and increased use of antidumping (since 1989) to manage the growth of China’s exports to the United States. In Figure 2, the bars indicate the number of U.S. antidumping measures imposed during various sub-periods between 1979 and 2008; the lines indicate the respective shares of Japan and China in total U.S. AD measures imposed in each of the sub-periods. U.S. targeting of Japan with antidumping reached its peak in the 1984–1988 period, when the United States imposed more than 20 new import restrictions on Japanese exporting firms; measures restricting imports from 24 On the economic effects of the end of the MFA, see Brambilla, Khandelwal, and Schott (forthcoming) and Barrows and Harrigan (2009).

25 Under the self-enforcing WTO system, the United States and China were free to choose this option as long as no country filed a complaint. The WTO’s Trade Policy Review of China (WTO 2006, 60–61) describes the VER settlements between the U.S. and China (as well as a similar arrangement between the EC and China): “On 10 June 2005, China and the European Communities signed a Memorandum of Understanding (MOU), placing export restraints on ten categories of Chinese textiles and clothing exports to the EC until 31 December 2007. The growth rates of these exports would be limited to between 8 percent and 12.5 percent per year. As a quid pro quo, the EC agreed to end its ongoing safeguard investigation on these products and to refrain from adopting measures as permitted under Article 242 of China's WTO Working Party Report, in categories not covered by the MOU...Under the Interim Measures, MOFCOM compiles a "Catalogue of Textiles Products Subject to Interim Export Administration", including exports of textiles and clothing subject to restrictions imposed by countries or regions unilaterally, and textile exports subject to temporary quantitative control under bilateral agreements. For each product listed in the Catalogue, the quota is partly assigned through a bidding system, and partly allocated based on the exporter's share in China's total export value for the previous year in the respective categories....A similar agreement was signed with the United States on 8 November 2005. The restraints on certain categories of textiles and clothing exports from China are effective from 1 January 2006 to 31 December 2008; exports of these products are expected to increase by 8 percent to 10 percent in 2006, by 13 percent in 2007, and 17 percent in 2008.” 26 These are the authors’ estimates based on the data in Bown (2009a). Investigations naming firms in more than one European Union member country for the same product are combined as a single case.

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