BANGKOK, Thailand, Feb 16 (IPS) – Trade in the Asia-Pacific region has become a new strategic reality. The newest Trade and Investment Trends in Asia and the Pacific (APTIT) emphasizes that rapid technological change and a strategic reconfiguration of supply chains are reshaping the way economies in the region trade and compete.
Rather than simply pursuing cost efficiency, companies and governments are increasingly prioritizing supply chain resilience, diversification and digital readiness. These forces are transforming export performance, changing the geography of trade and accelerating the rise of digitally powered goods and services across the region.
Digitally led trade growth
Export performance reflected this adjustment. Regional export growth slowed sharply from 7.9% in 2024 to 3.3% in 2025 (Figure 1). Moreover, ongoing price compression, driven by weak global demand, oversupply and falling commodity prices, has reduced the region’s share of global exports to 39%, continuing the decline that has been underway since 2021.
The differences became greater in the sub-regions. Growth is increasingly concentrated in economies that are able to take advantage of digital opportunities. Southeast Asia and East and Northeast Asia performed better in goods trade, supported by their growing role in semiconductors, AI-related hardware and advanced digital equipment.
In contrast, exports shrank in South and Southwest Asia, where traditional industries remain the backbone of export structures.
A similar pattern occurred in the services sector. In 2025, services exports increased by 5.4%, largely led by digitally deliverable services such as ICT, telecommunications, computer services and business and financial services. These are the functions that enable multinode production, data flows and the coordination of increasingly complex supply networks.
Traditional services such as travel and transportation continued to grow, but at a slower pace. East and Northeast Asia were once again the leaders in regional services export expansion.
A changing trade geography
The geography of trade is also evolving. For goods, geopolitical risk mitigation plays a greater role in determining trade routes and partners. Intra-regional goods trade remains significant at 53% exports and 56% imports, but its share declined in 2025 as companies diversified into extra-regional markets.
Export shares to the European Union and the rest of the world increased, while the United States became an increasingly important destination for most sub-regions, with the exception of those most directly affected by geopolitical tensions.
Services trade remains more global, with only about 21% of services exports taking place within the region. However, ESCAP analyzes point to a gradual strengthening of intra-regional ties. For example, Southeast Asia has shifted a growing share of its services exports to East and Northeast Asia, reflecting increasing intra-regional demand for digital coordination functions within service trade networks.
Outlook for 2026: slower growth, greater uncertainty
Looking ahead, the outlook for 2026 remains cautious. The volume growth of goods exports is expected to be around 0.6%. Developed economies’ exports are expected to contract by around 1.5% due to their exposure to high-tech supply chains under geopolitical pressure and weaker demand in key markets.
Developing Asian economies may show greater resilience, but outcomes will depend on China’s performance and the strength of global technology demand.
Services trade is expected to remain relatively stable. Digitally delivered services, especially ICT, computer and business services, are likely to continue to drive growth. The travel and transportation sectors may see gradual improvement, but several risk factors, including policy and regulatory uncertainty in digital commerce, climate-related disruptions and increasing compliance burdens on SMEs, cloud the outlook.
A structural shift, not a temporary distortion
Together, these developments point to a structural transformation in trade in the region and not a temporary cycle. On the goods side, companies are restructuring supply chains to build resilience by diversifying markets, shifting production stages and increasing the share of intermediate products destined for assembly closer to end markets in the European Union and the United States.
Yet this transition remains delicate: volumes have declined, margins have compressed and the region’s global export share continues to decline.
On the services side, digitalization is changing growth patterns. The strong growth of ICT, communications, computing and business services reflects the growing role in providing digital services such as data management, logistics platforms and remote business services that keep modern supply chains running
For Asia and the Pacific, and especially for developing economies, future gains will depend on combining digital transformation with practical resilience strategies. ESCAP’s analyzes are based on RDTII And RIVA pointing out areas that deserve policy makers’ attention: persistent complexity of digital trade regulations And increasingly dense connections in the value chain allowing disruptions to spread widely.
These trends underscore the importance of strengthening digital trade cooperation, as well as building resilient logistics and trade facilitation systems to keep intermediate goods moving reliably through supply chains. In this context, the increasing participation of countries in the UN regional treaty on facilitating cross-border paperless trade is a welcome development.
Witada Anukoonwattaka is an economic affairs officer, ESCAP; Yann Duval is Head of the Trade Policy and Facilitation Section, ESCAP, Nikita Shahu is advisor, ESCAP, Niccolo Sainati is an intern, ESCAP.
IPS UN Office
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