Mexico-Chile Trade: A Model of Latin American Integration

Mexico and Chile are two of the most open and integrated economies in Latin America. Their trade relationship is a cornerstone of regional cooperation, serving as a model for how two countries with shared values and complementary economies can deepen ties through diplomacy, trade liberalization, and multilateral engagement. Over the years, the Mexico-Chile partnership has evolved from a bilateral agreement into a broader framework of regional and international collaboration, underpinned by mutual trust and strategic alignment.

Diplomatic relations between Mexico and Chile date back to the early 19th century, although economic integration accelerated significantly in the 1990s. In 1998, both countries signed a Free Trade Agreement (FTA), which was enforced in 1999. Last year marked the 25th anniversary of the treaty, which marked a major milestone in Latin American economic integration and has since been one of the most successful and comprehensive bilateral trade accords in the region. The FTA covers not only goods and services but also investment, intellectual property, and dispute settlement.

In the context of the 25th anniversary of the bilateral FTA, Mexico and Chile renegotiated last year the modernization of the treaty adding two new chapters that included Gender and Commerce, seeking to promote the economic empowerment of women through international trade. A chapter focused on SMEs was also added, which seeks to integrate them into global and regional supply chains for bilateral trade.

Mexico and Chile are also founding members of the Pacific Alliance, a regional bloc that includes Colombia and Peru, with a shared commitment to free markets, export diversification, and integration with Asia-Pacific economies. This alliance has helped strengthen bilateral ties through shared policy objectives, joint business platforms, and coordinated strategies to attract foreign investment. Both countries are also members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the OECD, and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).

Trade Composition and Economic Complementarities

Mexico and Chile have developed a diverse and balanced trade relationship. Chile is Mexico’s third-largest trading partner in South America, while Mexico is Chile’s second-largest in the region after Brazil.

Mexico exports to Chile a variety of manufactured and industrial goods, including automobiles, electronics, pharmaceuticals, and machinery. Chile, in turn, exports to Mexico natural resources and agricultural products, such as copper, wine, fresh fruit, salmon, and wood products. This complementarity, industrial goods from Mexico and raw materials and food products from Chile, has allowed for mutually beneficial trade.

In April 2025, Mexico's exports to Chile amounted to US$95.8 million, while imports reached US$186 million, resulting in a trade balance of US$90.1 million in favor of Chile. Mexico’s main export to Chile in 2024 was automobiles and other motor vehicles primarily designed for passenger transport (US$130 million). The leading states of origin for these exports were Mexico City (US$400 million), the State of Mexico (US$205 million), and Nuevo León (US$133 million). Meanwhile, the primary import from Chile to Mexico in 2024 was refined copper and copper alloys (US$441 million). The top destinations for these imports were Mexico City (US$915 million), Jalisco (US$455 million), and the State of Mexico (US$195 million).

Between January and December 2024, foreign direct investment (FDI) from Chile into Mexico totaled US$231 million. The main recipient states were Durango (US$88.7 million), Jalisco (US$66.4 million), and Mexico City (US$27.1 million).

FDI has become a key component of the Mexico-Chile economic relationship. Mexican companies such as América Móvil, Bimbo, Cemex, and Grupo Alfa have established a strong presence in Chile, particularly in the telecommunications, food processing, cement, and petrochemical sectors. Meanwhile, Chilean firms have expanded into the Mexican market, especially in retail, agribusiness, and energy.

The openness of both economies, combined with stable regulatory environments and strong institutional frameworks, has created favorable conditions for investors. Furthermore, both countries offer access to major regional and global markets through an extensive network of trade agreements, positioning them as strategic platforms for Latin American multinationals seeking regional growth.

Challenges, Future Opportunities

Despite strong trade ties, there are challenges to address. Mexico's focus on North American markets under USMCA can at times overshadow its South American partnerships. Meanwhile, Chile faces economic headwinds and social pressures that could impact its domestic investment climate. Logistics and connectivity between the two countries remain limited compared to intercontinental links.

Nonetheless, several areas hold promise for deeper cooperation. These include clean energy, where Chile's green hydrogen ambitions and Mexico’s solar potential could be aligned; digital trade, as both countries modernize their digital infrastructure; and education and innovation exchanges, particularly through science and technology partnerships.

Moreover, the Pacific Alliance continues to offer a framework to expand trade not just bilaterally, but also with Asia-Pacific, where both Mexico and Chile have growing economic interests.