Asia’s trade and production networks are proving resilient despite rising geopolitical tensions, tariff nationalism, and climate-related challenges, according to the Asian Development Bank’s (ADB) Tokyo-based think tank, ADB Institute (ADBI).

In a report published on Monday, Feb. 16, ADBI highlighted that dense value-chain linkages—particularly in intermediate goods—remain largely intact, underscoring the durability of Asia’s production-centered integration model.

“Asia’s evolving trade and production landscape is best understood as a turning point, in which regional integration is being reshaped under pressure rather than unwound,” the think tank said.

While pressures are mounting, firms and governments are adapting through multi-hub strategies and sector-specific risk management rather than retreating from regional cooperation, the think tank noted.

The report pointed out that the main obstacle to deeper integration is not the lack of trade agreements but difficulties in implementing them. Fragmented rules of origin, complex administrative procedures, and uneven domestic capacities continue to limit the effective use of existing deals.

Experts said regulatory simplification, digital trade facilitation, and stronger institutional coordination could unlock substantial gains without overhauling Asia’s trade architecture.

The think tank stressed that digitalization and green transformation are key drivers of Asia’s next phase of integration. Interoperable payment systems, paperless trade procedures, and enhanced digital connectivity can help reduce transaction costs and boost inclusiveness.

Meanwhile, ADBI said decarbonizing production is increasingly shaping competitiveness across regional and global value chains. Experts cautioned, however, that expanding green trade requires attention beyond downstream manufacturing, including upstream supply chain conditions such as access to critical minerals and processing capacity, as well as the equitable distribution of value-added.

The think tank added that several Southeast Asian economies developing manufacturing hubs—such as Vietnam, the Philippines, and Malaysia—show high dependence on regional supply chains, particularly imports, consistent with their roles as assembly and processing centers.

By contrast, larger economies like China and India rely more on domestic supply, reflecting stronger internal absorption even as they remain integrated globally.

The think tank concluded that Asia’s policy focus should be on implementing existing agreements more effectively, advancing digital trade facilitation, and building resilient, low-carbon supply chains—especially for critical minerals—rather than attempting a complete redesign of regional trade frameworks.