Enhancing Trade Between Mexico and Malaysia
STORY INLINE POST
Q: How is the commercial relationship between Malaysia and Mexico evolving in terms of imports and exports?
A: In 2022, Mexico became our top trading partner in Latin America. Malaysia’s exports to Mexico amounted to US$3.7 billion last year, a considerable increase compared to the US$2.7 billion in 2021. Our main exports to Mexico are electrical and electronics products (mainly semiconductors), manufactures of metal, petroleum products, chemical products and machinery equipment parts). The expansion also was seen in the export of healthcare products and wood products, particularly furniture.
We are promoting healthcare exports to Mexico by educating Malaysian companies on the process of registering products with COFEPRIS.
On Furniture, we just concluded a program called EBizLink. The program aims to sell our furniture products online, directly to the end user. The program ran for four months, from October 2022 to January 2023. The total actual sales from the campaign were approximately MX$7 million (US$380,000).
Mexican products exported to Malaysia in 2022 amounted to US$665.5 million, an increase of 19.8% compared to the US$555.6 million in 2021. Malaysia imports mainly electrical and electronics products, machinery equipment parts, optical scientific equipment, transport equipment and chemical products.
MATRADE Mexico City is confident that trade will surge between the two countries this year and in the following years with the broad opportunities presented by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade pact. The export of healthcare, furniture, household electrical and petroleum products could expand in this market.
Q: What competitive advantages do Malaysian products and services offer Mexico?
A: Malaysian products and services are highly accepted in the Mexican market thanks to their quality and competitive price. While the countries are 16,506km apart, Malaysian products are still highly attractive to the Mexican market and our services comply with the country’s standards. We are trying to make Mexicans understand that our products and services are ready to be used at any time.
We seek to maintain a friendly business environment. We always say that a Malaysian businessperson, like a Mexican businessperson, is friendly and positive when generating business relations. We have a transparent and fair way of doing business and Malaysia’s government has been friendly to businesses and reliable suppliers. Malaysia is among the Top 15 places to do business worldwide.
Q: What would you say are the main barriers that need to be removed for the Mexico-Malaysia relationship to improve?
A: The challenges include logistics, the language barrier and the negative perception of Mexico in Malaysia. In terms of market access, the CPTPP opens new possibilities for the benefit of both Mexico and Malaysia. We are working to keep our products and services competitive to have even more opportunities to expand our markets. This treaty is a good start for both countries and brings more business opportunities and connections every day.
To address the negative perception of Mexico, we encourage Malaysians to come to the country and experience it themselves. Thanks to the connectivity that flights and the internet have enabled, it is very easy for anyone interested in Mexico to get to know the country. The business communities of both countries need to get on the same frequency, understand each other and seek for the correct points of reference, for example, MATRADE, that will facilitate business for both countries.
Q: How were relations between Mexico and Malaysia affected by lockdowns and what were the repercussions?
A: During the pandemic, much of the global economy came to a halt. While many could not do business anymore, we knew how to keep the business running by conducting an online business discussion between companies from both countries. Mexican and Malaysian business communities kept their communication channels open throughout the pandemic.
In 2023, the two countries are celebrating 49 years of diplomatic relations. We seek to strengthen the relationship between both countries because we consider Mexico to be a highly relevant partner for Malaysia, especially because its location can facilitate access to other markets in this region. We are seeking to keep Mexico as our top trading partner in Latin America. There are still opportunities to be found and we will continue to work hard to reach the best objectives for both countries and their businesses.
Q: The US-China trade war created a great opportunity for other Asian countries to become partners to the Americas. What efforts is Malaysia making in this regard?
A: The trade war is one of the reasons behind the move toward nearshoring as the US market is the largest consumer market in the world. Companies that were used to trading between regions are looking for suppliers closer to home. We see this as an opportunity, even though the term “nearshoring” is not too popular in Malaysia but attracting FDI is an important element for us.
We are attracting investment into Malaysia so companies could see the benefits of operating in the best location in Southeast Asia. Investing in Malaysia will bring companies and their partners great opportunities in global trade. We can expand the global supply chain and are working toward achieving great things that can benefit and strengthen both countries.
Q: What are the embassy’s objectives for 2023 in terms of trade between the two countries?
A: We plan to capitalize on nearshoring opportunities in Mexico. During 2022, 16% of Mexican companies grew because of this commercial phenomenon. Foreign investment in Mexico has increased and will continue to increase because of the country’s proximity to the US, the USMCA and less expensive labor. When the opportunities come knocking at the door, the Mexican industry will need the support of a great supply chain and this is where there will be a great opportunity for Mexico and Malaysia to work together closely. We will work harder to promote business development between both countries and boost our economies.
Syed Sahibulbahri Syed Abdul Hamid serves as Malaysia’s Trade Commissioner/Counselor for Mexico, Belize, Costa Rica, Guatemala, Honduras, Nicaragua, Panama and El Salvador. He joined Malaysia’s External Trade Development Corporation (MATRADE) in July 2007 as Assistant Manager of the Trade Advisory and Services Unit.