• Despite a decline in global and regional trade in 2016, a mild recovery seems underway, with volumes and prices growing in the early months of 2017, buoyed by stronger demand in major economies within and outside the region. However, downside risks loom over the trade recovery. The structural factors that caused the weak after-crisis trade performance persist, threatening the chance of a full recovery. Following the trend in developed countries, the aggregate demand of developing countries in the region indicates weakening trade intensity. In addition, heightened uncertainties in the trade policy directions of developed economies have raised concerns about a potential relapse in global trade. While fears about rising protectionism have not materialized, the near-term prospect of trade recovery is still fragile.

  • Commercial services trade has become essential for developed and developing countries to increase productivity in both agricultural and manufacturing sectors. Additionally, it is critical for building infrastructure and enhancing access to quality health, education and other important services. Commercial services are grouped into four major categories: transport, travel, goods-related services, and other commercial services.

  • Although the Asia-Pacific region remains a major investment destination, foreign direct investment (FDI) inflows in the region declined slightly in 2016. This decline may be attributed to timid growth, low commodity prices, and structural reforms towards higher value-added industries in leading economies in the region. On the contrary, FDI outflows from the region increased significantly, further establishing the region as a major outward investor. Overall, the different subregions and economies in the Asia-Pacific region performed heterogeneously.