Trade in the Asia-Pacific region is undergoing a strategic transformation, driven by rapid technological change and the reconfiguration of supply chains. According to the latest Asia-Pacific Trade and Investment Trends (APTIT), firms and governments are moving beyond cost efficiency, prioritizing supply chain resilience, diversification, and digital readiness. These shifts are reshaping export performance, altering trade geography, and accelerating the rise of digitally driven goods and services across the region.
Export performance has reflected this transition, with regional export growth slowing from 7.9% in 2024 to 3.3% in 2025. Persistent price compression caused by weak global demand, excess supply, and falling commodity prices has reduced the region’s share of global exports to 39%, continuing a decline since 2021. Subregional disparities are widening, with growth concentrated in economies that capitalize on digital opportunities. South-East Asia, East Asia, and North-East Asia outperformed in merchandise trade, benefiting from semiconductors, AI-related hardware, and advanced digital equipment, while exports in South and South-West Asia contracted due to reliance on traditional industries.
Services trade has shown a similar pattern. In 2025, regional services exports grew by 5.4%, led by digitally deliverable services such as ICT, telecommunications, computer, and business services. These services underpin complex supply networks and support multinational production and data flows. Traditional services like travel and transport continued to grow but at a slower pace, with East and North-East Asia leading regional services export expansion.
The geography of trade is also evolving. Geopolitical risk mitigation increasingly influences trade routes and partners. While intraregional merchandise trade remains significant, accounting for 53% of exports and 56% of imports, its share declined slightly in 2025 as businesses diversified toward extra-regional markets, including the European Union and the United States. Services trade remains more global, with only 21% of exports within the region, though intraregional linkages are strengthening, particularly in digital services, as South-East Asia redirects more exports toward East and North-East Asia.
The outlook for 2026 is cautious. Merchandise export volumes are projected to grow only around 0.6%, with developed economies expected to contract by 1.5% due to geopolitical strain on high-tech supply chains and weaker global demand. Developing Asian economies may show resilience, contingent on China’s performance and global technology demand. Services trade is expected to remain steady, with digitally deliverable services continuing to drive growth, while travel and transport may see gradual improvement. Risks include regulatory uncertainty in digital trade, climate-related disruptions, and rising compliance burdens for MSMEs.
These developments indicate a structural shift rather than a temporary fluctuation. Firms are reengineering supply chains to enhance resilience through market diversification, relocation of production stages, and increased intermediate goods assembly closer to end markets in the European Union and the United States. Despite these efforts, volumes have slowed, margins are compressed, and the region’s global export share continues to decline.
Digitalization is reshaping services growth, with ICT, communications, computer, and business services increasingly supporting data management, logistics platforms, and remote operations that sustain modern supply chains. For developing economies in Asia and the Pacific, future gains depend on combining digital transformation with practical resilience strategies. ESCAP analyses highlight persistent regulatory complexity in digital trade and dense value chain networks that amplify disruptions. Strengthening digital trade cooperation, resilient logistics, and trade facilitation systems is critical, and increased participation in the UN treaty on cross-border paperless trade represents a positive step toward sustaining regional supply chain efficiency.
