Protectionism in International Trade: The Case of the European Union Member States

Purpose: The aim of the paper is to present an original concept of measuring the degree of protectionism (DP) by constructing a synthetic measure of DP on the basis of the Technique for Order Preference by Similarity to the Ideal Solution (TOPSIS). Owing to application of TOPSIS method, another goal was achieved in ranking and classifying EU member states in terms of degree of protectionism. Design/Methodology/Approach: In the study of TOPSIS method, which is a multi-criteria decision-making method that allowed to measure the degree of protectionism, EU member states were investigated. Findings: The results reveal that EU countries were not strongly diversified as regards to DP level (with some exception of Germany and The Netherlands). Furthermore, no EU member states can be qualified as purely liberal nor fully protectionist. The results of the study referring to top protectionist countries reveal some similarities to the results of other classifications based on different methodology. Practical implications: The outcomes of the study might be used by decision-makers in terms of commercial policy, both at the EU institutional level as well as outside this framework - by EU trade partners. Ranking might also serve as an instrument for boosting commercial policy and practices promoting further trade liberalization. Originality/Value: Although there are plenty of papers on protectionism, so far there is no universally accepted method of measuring the phenomenon. Furthermore, the majority of studies focus on tariffs only or selected trade instruments, what brings the risk of underestimation of degree of protectionism, as countries use plenty of different measures in this respect. Thus, in our paper a new approach was proposed. The application of TOPSIS method with data extracted from Global Trade Alert that provides comprehensive list of all diverse trade policy interventions. The paper contains an original authors’ concept of measuring DP, which might be also applied to comparisons of EU member states with other countries, thus the paper will contribute to the development of literature.