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MNI (London)
By Christian Vits
     FRANKFURT (MNI) - Protectionist measures and higher tariffs are not likely
to achieve what they are intended for, European Central Bank Executive Board
member Benoit Coeure said Friday.
     "Automation implies that protectionist policies aimed at preventing -- and
reversing -- job losses among low-skilled workers in manufacturing are unlikely
to achieve their aim," Coeure noted in a speech in Skopje, Macedonia.
     "This is because reshoring, forced or not, is ultimately the outcome of
regained competitiveness and changes in relative factor intensities," he added.
"Production then becomes more capital and skill-intensive and is unlikely to
create many new jobs for low-skilled workers."
     Higher tariffs are also less effective than they were in the past, given
that intra-firm trade has grown substantially, Coeure stressed. "As a result,
higher tariffs may well reduce domestic profitability."
     The recent rebound in trade mainly reflects cyclical factors, according to
Coeure. Accommodative monetary policies worldwide have succeeded in boosting
growth and investment and, with them, global imports.
     "Structural headwinds remain, however," he said. "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 pre-crisis boom."
--MNI London Bureau; tel: +44 203-586-2225; email:
--MNI Frankfurt Bureau; +49 69 97782671; email:
[TOPICS: M$X$$$,M$$EC$]
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