Trade integration deepens in APAC amid pandemic: ADB report

APAC trade grew by 29.6 per cent in the first three quarters of 2021 compared with global trade growth of 27.8 per cent.

Trade within the region rebounded by 31.2 per cent during the same period, following a 3.1 per cent contraction in 2020, according to the Asian Economic Integration Report (AEIR) 2022 released recently. Intra-regional trade made up 58.5 per cent of the region’s total trade in 2020, the highest share since 1990.

The strong intraregional trade, along with the release of global pent-up demand and the early economic recovery in China, underpinned the region’s economic resilience, ADB said in a release.

Measures to further promote trade and investment across borders—such as the newly launched Regional Comprehensive Economic Partnership free trade agreement—can help advance regional trade and economic integration and pave the way for a sustainable recovery from the pandemic, according to the report.

“The strengthening trade and value chain linkages among economies in Asia and the Pacific are an encouraging sign for a resilient recovery from COVID-19,” said ADB chief economist Albert Park.

“The pandemic has caused visible economic damage and reversed many of the region’s hard-won gains in reducing poverty. We must build on the achievements of regional integration and cooperation to support a return to inclusive and sustainable economic growth,” he added.

A sustained recovery will require close policy cooperation on multiple fronts, particularly in terms of managing the exit from the pandemic and establishing health and safety protocols related to economic and border reopening. Strengthening regional health security and supply chains, as well as mitigating climate change risks, would boost the region’s resilience to future shocks.

Integration among economies in Asia and the Pacific has continued to deepen in areas including new technology and digital connectivity, environmental cooperation, trade linkages, investment, and value chain participation, according to the report.

Foreign direct investment into the region also remained resilient, declining by only 1.3 per cent in 2020, compared with a 34.7 per cent drop globally. Meanwhile, remittance inflows to the region are estimated to have grown 2.5 per cent in 2021, after a 2 per cent drop in 2020.

Fibre2Fashion News Desk (DS)