benoit cœure : trade as an engine of growth - prospects and lessons for europe speech by mr benoit cœure, member of the executive board of the european central bank, at the nbrm high level international conference on monetary policy and asset management, skopje, 16 february 2018. * * * i thank you for inviting me to speak here in skopje today1. i would like to take this opportunity to discuss an issue which i believe is key for the economic future of europe and particularly relevant here, in the western balkans : the prospects for trade as an engine of growth. for several years now, global trade growth has puzzled many observers. while global trade grew at about twice the rate of gdp before the crisis, it has slowed measurably since then and has often grown at the same rate as, or even below, that of global output. however, in 2017, world import growth once again outpaced world gdp growth. the euro area is benefiting from this recovery, with export growth the highest in many years. in my remarks this morning, i will argue that the rebound in trade mainly reflects cyclical factors. accommodative monetary policies worldwide have succeeded in boosting growth and investment and, with them, global imports. structural headwinds remain, however. maturing global value chains, geographical shifts in trade and an accelerating push towards more automation make it less likely that trade can again expand at the pace observed during the precrisis boom. to the extent that trade helps lift growth, policymakers have a role to play in providing an environment that is conducive to trade. at the same time, they need to ensure that appropriate systems are in place to support workers affected by secular shifts in both trade flows and labour demand. rebound in world trade let me start with a few facts and charts. last year, global imports expanded by 5 %, the strongest growth in seven years. on the left - hand side of my first slide you can see that the rebound in global trade was broad - based, with both emerging and advanced economies contributing in roughly equal proportions. on the right - hand side you can see that this by and large reflects the fast broadening of the global economic expansion. at the end of last year, 75 % of the economies worldwide experienced growth above their three - year averages. in 2016, this share was below 30 %. so, the global economy is in a much more robust state today than it was just a

to the consumer, then firms may have fewer reasons to spread production across countries. 9 in other words, robots could turn global value chains on their head and cause firms to reconsider offshoring practices. a survey by the boston consulting group, for example, revealed that more than 70 % of senior manufacturing executives in the united states consider that robotics improve the economics of local production. 10 lower automation costs are a key ingredient of this rethinking. indeed, while the cost of labour is rising in traditional low - cost developing economies, the cost of robots has fallen sharply. by some estimates, the average price of industrial robots has declined by about 40 % over the past ten years and is projected to decline considerably further. 11 and the potential for automation is enormous. a recent mckinsey report suggests that 60 % of global manufacturing activities, and 81 % of manufacturing hours, could be automated using existing technology. 12 this is not just a topic for the future. we are already seeing clear signs of accelerating automation. according to data from the international federation of robotics, the global supply of industrial robots grew by 19 % on average between 2009 and 2016. it is forecast to increase further by almost 80 % by 2020, bringing the total stock of robots to around three million. of course, technological progress also changed the way we produced goods and services in the past. but because the current breakthroughs – just think of 3d printers, autonomous vehicles or cognitive computing – are virtually unprecedented in scope and scale, the “ march of the machines ” may potentially render a significant share of the international fragmentation of trade 4 / 10 bis central bankers'speeches redundant, particularly in the manufacturing sector. the rise of automation may therefore accelerate a process that dani rodrik termed “ premature deindustrialisation ” in developing economies. 13 this term describes a pattern whereby developing economies see their manufacturing base shrink at a level of income that is far below the level attained by advanced economies before they started to deindustrialise. this means two things. first, the impact of reshoring and the automation of unskilled manufacturing processes on developing countries ’ labour markets could be significant. the international labour organization recently estimated that around two - thirds of jobs in the textile, clothing and footwear industry in indonesia are at risk of automation. 14 for cambodia, the figure is 90 %. second, automation may become a headwind to the catching - up process of developing countries. historically, productivity in the manufacturing sector has tended