Southeast Asian nations must rebalance their economies or their trade will be hit once oil prices resume their rise, said a study by logistics firm DHL and the Economist Intelligence Unit (EIU).

The study examined 383 trading relationships between 39 countries in Asia, the European Union (EU) and the North America Free Trade Agreement (Nafta).

It showed that high oil prices have the greatest effect on Southeast Asian trade compared with trade between the EU and Nafta or all 383 trading relationships.

A 1 per cent lift in oil prices would lead to a 0.12 per cent decrease in trade between the EU and Nafta and a 0.24 per cent decrease for all 383 trading relationships. But trade between Asean nations and the West would fall 0.3 per cent.

The study said the greater impact on Southeast Asia was due to the type of goods being traded.

West-to-West trade consists of a higher proportion of high-value goods such as computers, aircraft and medical devices.

In contrast, Asian nations tend to have a much higher proportion of trade centred on low-value goods such as coal and gas, palm oil, and textiles and shoes.

Transport costs, determined by the price of oil, comprise a much larger percentage of the final cost of low-value goods. Therefore when the price of oil goes up, they have a disproportionately larger impact on Asean’s trade flows than those between the EU and Nafta.

Frank Appel, chief executive of DHL’s parent, Deutsche Post World Net, said: "The challenge that Asian trade faces today is to hasten the migration to high-value goods and focus on managing their growing dependence on oil."

That means Asian companies should move into areas that are more knowledge-intensive, technology-rich and with a greater value-added component.

It also means having "their citizens working as computer scientists and electrical engineers (rather) than as coal miners, farmers and garment makers", said the report.

Oil prices, which were at a record US$147 five months ago but have since plunged, were trading at $43 yesterday (December 10), but the EIU forecasts that they will rise once the global economy recovers.

It is urging Asian nations to push manufacturing and exports up the value chain, as "high-value goods offer better insulation against the fallout from an era of extreme oil price volatility".

Justin Wood, director of the EIU’s corporate network for Southeast Asia, said: "Much of Asia has grown up on the back of vibrant trade with the West. But with the economies of North America and Europe forecast to perform poorly next year, the impact on Asia’s economies could be serious indeed. This study...illustrates clearly the need for governments in the region to rebalance their economies."