Asia and the Pacific continued to serve as the primary driver of global trade and investment throughout 2025, according to the latest Asia-Pacific Trade and Investment Briefs 2025/26 released today by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
The report highlights a year defined by “front-loading” tactics and digital transformation, even as firms began prioritizing risk diversification over traditional cost-efficiency. While the region outperformed the global average, experts warn of a significant slowdown in 2026 as restrictive trade policies and geopolitical tensions take hold.
In 2025, global merchandise export volume grew by 2.8%, largely fueled by “tariff anticipation”—businesses rushing shipments to beat expected policy changes. The Asia-Pacific region outpaced this global average with a 3.3% increase in exports, though growth was notably uneven:
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Winners: East and South-East Asia saw electronics-led surges.
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Laggards: South and South-West Asia experienced a 2% decline.
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Shifting Strategy: Supply chains are moving toward “nearshoring” and “reshoring” to the U.S. and EU to mitigate risks. Forecast Alert: Regional trade growth is projected to plummet to 0.6% in 2026 due to heightened geopolitical instability and new trade barriers.
While merchandise faced volatility, the services sector proved more resilient. Commercial services exports rose by 5.4% in 2025. Key highlights include:
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Digital Dominance: Modern services led the charge, with Telecom/ICT (13%) and Business/Financial services (11%) seeing double-digit gains.
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Real Estate Slump: Construction services plummeted by 11%, reflecting a broader regional downturn in property markets.
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Emerging Hubs: Firms are increasingly looking toward India and South-East Asia as alternative service hubs to diversify away from traditional centers like China and Japan.
The Asia-Pacific region has solidified its status as the world’s hub for trade diplomacy, accounting for 61% of all active preferential trade agreements (PTAs) worldwide.
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Active Agreements: 258 total, with 12 new agreements signed in 2025.
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Digital Pioneering: The region participated in 12 of the world’s 16 Digital Trade Agreements.
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Focus Areas: Newer deals heavily emphasize sustainability, supply chain resilience, and “mini-FTAs” designed for targeted de-risking.
Foreign Direct Investment (FDI) underwent a structural shift in 2025. While the total value of greenfield investment pledges fell by 21% to $253 billion, the number of project announcements reached near-record highs.
| Economy | Investment (USD) | Key Note |
| India | $50 Billion | Largest individual target economy |
| Australia | $30 Billion | Key destination for primary/renewable sectors |
| South Korea | $25 Billion | Massive 303% surge in commitments |
| South-East Asia | $74.4 Billion | Top destination subregion |
The data suggests a transition from “low-cost efficiency” seeking to “innovation-seeking” investment, with more than 60% of projects concentrated in ICT and renewable energy.
ESCAP emphasizes the urgent need to harmonize fragmented trade rules and protect less developed economies from being sidelined by “mini-lateral” agreements. Strengthening regional cooperation remains essential to reinforcing a stable, rules-based global system.
