##tion, multilateral trade liberalisation and an easing of global politics all worked together to boost global economic and financial integration to levels never seen before. a historic moment was when china joined the wto in 2001. closer to home, the introduction of the euro was a huge milestone. not surprisingly, this was also a period marked by high economic growth. however, the pace of globalisation has stagnated since 2008, with trade - to - gdp stabilising. over the past five years, the threats to free trade and investment have increased. scepticism about globalisation has grown. international cooperation is in retreat. brexit, ongoing tensions between the us and china, the russian invasion of ukraine and the conflict in the middle east have put further pressure on globalisation. in 1 / 4 bis - central bankers'speeches response to geopolitical developments, countries and blocs more often apply a policy of strategic autonomy. according to the imf, around 3, 000 trade restricting measures were imposed last yearnearly triple the number imposed in 2019. and many firms around the world are reorganising their supply chains and are considering re - shoring, near - shoring or friendshoring. so while global trade is still resilient, we are already seeing more and more cracks appearing under the surface. of course, these policies don't come out of nowhere. strengthening national security and curbing strategic economic risks are logical policies in a world that has become a more dangerous place. but, if not properly managed, the economic costs of these policies could be very high. coming from the netherlands, i know the benefits of free trade for a small and highly open economy. our share of imports and exports is almost 180 % of gdp, one of the highest in the world. that makes us vulnerable to disruptions in global value chains. while the netherlands may be a rather strong case of economic openness, the essence also holds for the eu as a whole. the numbers show that even as a bloc, the eu economy is more open than, for example, china and the us. eu trade with other countries is more than 40 percent of eu gdp. europe has prospered as an open economic region, but is also more heavily exposed to the effects of geo - economic fragmentation. and let's not forget that today's economies are much more connected than only a few decades ago. global trade - to - gdp is now 60 percent compared to 24

klaas knot : free trade and financial stability, containing the effects of geopolitical fragmentation speech by mr klaas knot, president of the netherlands bank, at the eurofi high level seminar, ghent, 23 february 2024. * * * chart to the speech thank you. it's always a pleasure to be at eurofi, a great meeting place to exchange views on finance and the economy. and could there be a more fitting place for this than the city of ghent? when you are in the city centre, and you walk from the magnificent belfry tower, past the st nicolas church, to the st michiels bridge and the korenlei, you cannot escape the impression that this is a city that not only has a rich history, but also a history of richness. and indeed, in the 13th and 14th centuries ghent was the silicon valley of europe. it was the first real industrialised city, where wool was transformed into very fine cloth,'laken'in dutch, which was in high demand in the rest of europe. this industry was so highly developed that wool was imported from scotland and england. thanks to innovation and trade, ghent was one of the biggest and most prosperous cities in europe. free trade, economic growth, prosperity : they often go together. and that is a fitting illustration of why we should be concerned also today about the growing geopolitical tensions and geo - economic fragmentation, and their impact on cross border trade and investment. let's have a look at the history of trade. as the chart shows, free trade has experienced periods of rise and fall throughout history. during much of the 19th century we saw an increase in trade, as measured by the global - trade - to - gdp ratio. this golden age of industrialisation and international trade came to an abrupt end with the outbreak of world war i. during the first half of the 20th century, world trade collapsed as a result of the great depression, nationalism and war. in the post - war decades, there was a prolonged period of growing world trade. of course, it was the period of the cold war, and trade between the eastern and western blocs was very limited. nonetheless, world trade increased, driven by the post - war recovery and policies of trade liberalisation. after the fall of the iron curtain, trade between east and west expanded rapidly. this coincided with a period of hyper - globalisation in the 1990s and 2000s. the itrevolu