Mexico-Malaysia: Strategic Cooperation Between Emerging Economies

Mexico and Malaysia have cultivated a dynamic and mutually beneficial trade relationship over the past few decades. Their strategic positions, Mexico as a gateway to North America and Latin America, and Malaysia as a pivotal player in Southeast Asia, reflect broader global trends toward supply chain diversification and trade liberalization.

Malaysia, located at a crucial nexus of global trade and production, is recognized as one of the world's most open economies, with approximately 40% of its employment linked to exports. While traditionally known for palm oil, rubber, gas, and oil, Malaysia has also specialized in advanced electronics, semiconductors, microprocessors, and innovative technology. As chair of the Association of Southeast Asian Nations (ASEAN) in 2025, Malaysia is central to a regional bloc projected to become the world's fourth-largest combined market by 2030. Furthermore, approximately 30% of global maritime trade transits through the Strait of Malacca, making it a critical international passage.

Mexico and Malaysia commemorated 50 years of diplomatic relations in 2024, marking a half-century of cooperation and mutual respect. Their formal diplomatic ties, established in 1974, have been steadily strengthened through high-level visits, memoranda of understanding, and active participation in international organizations such as the United Nations, the World Trade Organization (WTO), and the Asia-Pacific Economic Cooperation (APEC) forum. Both democratic and diverse nations, their shared membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a pact they co-founded, offers significant opportunities to intensify economic exchanges and enhance competitiveness. Mexico's aspiration for closer ties with ASEAN through adherence to the Treaty of Amity and Cooperation is expected to unlock further collaboration and mutual benefits.

Mexico-Malaysia Trade Relationship

Mexico stands as Malaysia's largest commercial partner in the Americas, with bilateral trade having doubled over the last decade: a clear indicator of their flourishing relationship. This collaboration extends beyond trade to encompass growing links in education, art, gastronomy, and interpersonal exchanges.

The trade relationship is notably complementary, focusing on industrial goods, electronics, and automotive components. Mexico's primary imports from Malaysia include semiconductors, electronic circuits, computers, and telecommunications equipment. Conversely, Malaysia imports Mexican goods such as automobiles, chemicals, processed foods, and beer.

In 2024, electronic integrated circuits were both Mexico's main sale to Malaysia (US$151 million) and its main purchase from Malaysia (US$6.03 billion), highlighting the deep integration in the electronics supply chain. The main origins of sales to Malaysia were Jalisco (US$275 million), Baja California (US$95 million), and Nuevo Leon (US$47 million). Meanwhile, the main destinations of purchases made to Malaysia were Chihuahua (US$6.36 billion), Jalisco (US$1.96 billion), and Nuevo León (US$1.27 billion).

In April 2025, international sales from Mexico to Malaysia were US$605 million, while international purchases reached US$13.31 billion. The above results in a trade balance of US$12.71 billion in favor of Malaysia.

While trade has seen consistent growth, foreign direct investment (FDI) remains an area for further development. From January to December 2024, Malaysian FDI in Mexico amounted to US$50.7 million, bringing the total from January 1999 to December 2024 to US$736 million. In the period January to December 2024, the Foreign Direct Investment (FDI) from Malaysia to Mexico was US$50.7 million. The states that received the highest FDI were Tlaxcala, Mexico City, and Quintana Roo.

From January 1999 to December 2024, Mexico has received a total of US$736 million in FDI from Malaysia, distributed in equity capital (US$659 million), inter-company debts (US$54.3 million), and reinvestment of earnings (US$22.4 million).

A Common Vision

Both countries are active participants in multilateral and regional agreements like the CPTPP, which eliminates tariffs and fosters regulatory alignment, significantly facilitating trade and investment. These overlapping memberships create a broader framework for cooperation, especially as global supply chains undergo reconfiguration.

Despite the significant progress, challenges persist. High logistics costs, language and cultural barriers, and limited direct connectivity between the two nations can hinder deeper economic integration. The trade imbalance favoring Malaysia also prompts discussions in Mexican policy circles about boosting local exports and attracting more Malaysian investment into strategic sectors like clean energy and manufacturing.

Nonetheless, emerging trends, such as nearshoring in Mexico and Malaysia's push for a digital economy, present new opportunities. Mexican industries seeking to diversify suppliers and secure components may find Malaysian firms attractive partners, while Malaysian investors can leverage Mexico as a gateway to access the United States and Latin American markets under the USMCA framework.