Check against delivery.
The OECD’s most recent Economic Outlook shows that despite high policy uncertainty, the global economy has continued to be remarkably resilient throughout the first half of this year, with annualised GDP growth of 3.2% in the first six months of this year.
However, looking ahead, high-frequency activity indicators point to slowing momentum in industrial production, labour markets and consumer confidence.
We project global growth to soften slightly to 2.9% next year, while downside risks to this outlook remain significant.
Additional increases in barriers to trade, or prolonged policy uncertainty, could lower global growth further – by raising production costs and weighing on investment and consumption. Increased barriers to trade also risk weakening rather than strengthening the resilience of global supply chains.
Our assessment is that economies across the Asia Pacific would be among the most affected by any further trade fragmentation, given deeper integration in global supply chains and higher dependency on trade in intermediate goods.
Constructive dialogue between countries remains a key priority to ensure a lasting resolution to trade tensions.
All other things being equal, well-functioning open global markets deliver stronger growth, higher incomes, increased choices, lower costs and better living standards.
APEC economies are a powerful example of these benefits.
Since APEC was established in 1989, its share of global trade in goods and services has increased from 39% to just under half of all global trade, with that increase in global trade unlocking significant increases in incomes and living standards.
Indeed per capita GDP across APEC in real terms has more than doubled since 1989 from USD 8 000 to USD 19 000 in 2023.
We need to continue to draw on these very real benefits in terms of growth, innovation, incomes and living standards, while tackling genuine and legitimate concerns about problems with the way the system is currently operating.
The capacity to tackle unfair market distorting trade practices.
The need to ensure a more level playing field,
To ensure secure and reliable global supply chains and to strengthen economic security.
Our strong advice to all Governments is to work harder, bilaterally and multilaterally, to find the best possible ways to make our international trading arrangements fairer and function better, in a way that preserves the economic benefits of open markets and the rules-based global trading system.
We must support the central role of the WTO in maintaining a fair, non-discriminatory, open, stable and rules based international trading system, while pursuing reforms of and with the WTO to more effectively address some of the key challenges in front of us.
Finalising reform of the WTO rule book in relation to e-commerce and digital trade.
Reforming and strengthening the WTO’s disputes settlement system.
Pursuing reforms to boost supply chain resilience and economic security while keeping markets open.
In relation to some of the specific policy priorities we see in relation to global trade:
First, on fostering more resilient global supply chains.
Our assessment across about 4 800 globally traded goods shows that since the late 1990’s, the proportion of import concentration has increased by about 50% – and by extension so has the risk of supply chain disruptions.
However, simply re-localising production is not the answer to legitimate concerns about import concentration related risks.
We estimate that addressing high concentration by focusing only on relocating production domestically would reduce global real GDP by more than 5%, while creating new vulnerabilities to shocks.
Instead, we recommend a balanced approach, strengthening supply chain resilience through diversification and modernisation, while maintaining the benefits of open, rules-based international trade.
Proactively identifying and mapping key vulnerabilities within supply chains, diversifying suppliers across regions and avoiding excessive reliance on a single country, particularly for critical goods or resources.
Supporting firm-level implementation of risk management strategies and responsible sourcing standards.
Boosting investment in risk management tools and increased digitalisation to improve supply chain transparency, facilitating selective and co-ordinated stockpiling and measures to help small and medium-sized enterprises (SMEs) participate more robustly in global value chains.
Promoting regulatory interoperability and increased efficiency, especially in relation to export controls and investment screening.
Integrating trade, industrial, and security policies, ensuring national security exceptions are clearly defined and do not serve as disguised trade barriers. Policy responses should be proportional, evidence-based, and aligned to avoid fragmented responses that could undermine resilience.
And, very practically, strengthening trade facilitation tools to eliminate chokepoints at borders.
The OECD’s Trade Facilitation Indicators show that APEC economies have made significant progress in reducing bottlenecks and red tape at borders since 2017.1
But there are opportunities to go further, by increasing automation of customs processes, promoting single window systems and fostering greater border agency co-operation.
Digitalising border processes and replacing inefficient paper-based processes can expedite customs approvals, reduce administrative costs, enhance visibility on potential bottlenecks and indeed boost trade flows.
We estimate that a 10% improvement globally in border automation and streamlined digital processes, as measured by the OECD Trade Facilitation Indicators, could provide a one-time boost of up to 18% to global goods exports.2
Further – we recommend to lift current barriers to the trade in digital services to support firms’ agility and responsiveness to disruptions.
Digital tools, including artificial intelligence, can be a powerful way to enhance resilience in supply chains by helping firms better anticipate disruptions, optimise logistics and adapt in real time to shifting market conditions.
However, the OECD Digital Services Trade Restrictiveness Index shows that the average level of restrictiveness on digital trade across most of the APEC region has grown by 8% over the past decade and is higher than the OECD average.
These restrictions increase costs, make it more difficult for businesses to manage operations across borders and ultimately reduce flexibility in supply chains.
Key opportunities to unlock further digital services trade include lifting barriers to investment and competition in communication services and promoting harmonisation and interoperability of cross-border data flow regulations together with well calibrated and effective safeguards.
Finally, we recommend removing key trade barriers in transport and logistics services.
Trade barriers in these sectors, such as restrictions on competition for port services, have been rising, leading to higher costs and undermining adaptability in manufacturing supply chains.
We estimate that lowering trade barriers to global supply chain-related services could result in trade cost reductions of between 5% and 14% on average across all economies, with the highest impact in air transport of up to 24%.
In conclusion,
The OECD looks forward to continuing to support APEC with our unique data and analysis across the full range of your priorities, including to unlock stronger connectivity and resilience, for a more resilient, innovative and prosperous future for the Asia-Pacific region and globally.
1 Exact values for APEC regional average (all member economies except Chinese Taipei): 1.47 in 2017 to 1.67 in 2024 (out of a maximum of 2).
2 OECD (2025), “The digitalisation of trade documents and processes: Going paperless today, going paperless tomorrow”, OECD Trade Policy Papers, No. 297, OECD Publishing, Paris, https://doi.org/10.1787/64872f25-en.
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