[Mexico City = E-Daily Reporter Kim Sang-yoon ] President Lee Jae-myung announced that negotiations on the Korea-Mexico Economic Agreement will resume. He also proposed that if the Mexican Air Force proceeds with a fighter jet modernization project, the South Korean-made FA-50 light attack aircraft could serve as the foundation for defense cooperation between the two countries. This proposal aims to institutionally support economic relations with Mexico—where approximately 500 Korean companies have established a presence—and expand areas of cooperation to include high-tech industries and defense.
In an interview with the local daily El Universal ahead of his summit with Mexican President Claudia Sheinbaum, President Lee stated, “It is now time to establish an institutional framework befitting our robust economic cooperation,” adding, “It is important to resume negotiations on the South Korea-Mexico Economic Partnership Agreement, pursue the conclusion of a social security agreement, and strengthen investment protection measures.”

◇FTA Negotiations Stalled Since 2008… “Institutions Suited to Trade and Investment Are Needed”
There is currently no bilateral Free Trade Agreement (FTA) in force between South Korea and Mexico. The two countries began negotiations on the Strategic Economic Complementarity Agreement (SECA) in 2006 but were unable to bridge their differences regarding the scope of market opening. While Mexico was reluctant to reduce tariffs on key manufactured goods—a priority for South Korea—and to open its government procurement market, Mexico demanded the immediate elimination of tariffs on South Korea’s sensitive agricultural products. Subsequently, the two sides elevated the negotiations to the level of an FTA and held two rounds of official talks in 2007 and 2008, but these were suspended. Although the two countries announced the resumption of negotiations in 2022, this did not lead to the conclusion of an agreement.
The burden resulting from the absence of an agreement resurfaced this year. Effective January 1, Mexico raised tariffs on 1,463 items—including automobiles, auto parts, steel, and home appliances—imported from countries, such as South Korea, that do not have a trade agreement with Mexico. As local South Korean companies have conveyed the difficulties caused by the tariff hikes to the government, the need for an agreement between the two countries is growing. In May, the South Korean government requested that Mexico ensure the stable operation of the existing tariff reduction system, expand the duty-free import quota for automobiles, and establish a new quota for home appliances.
An agreement between the two countries is necessary because trade and investment continue to expand. This is largely due to the fact that Korean companies have been utilizing Mexico as a production and export hub targeting the North American market. President Lee described Mexico as Korea’s largest trading and investment partner in Central and South America and a key hub linking the economies of North America and Central and South America, emphasizing that “for Korean companies, Mexico is more than just a production base; it is a strategic platform for entering the North American and global markets.”
Approximately 500 Korean companies are currently operating in Mexico. Korean corporate investment totals about $13.3 billion, and these investments have created approximately 150,000 jobs. Since the two countries established a strategic partnership in 2005, the scale of Korean corporate investment in Mexico has increased 26-fold.
In particular, the social security agreement is significant in that it can reduce the burden of double pension premium payments for workers dispatched to Mexico. The strengthening of investment protection is seen as an effort to enhance predictability for companies building factories or expanding their operations in Mexico. The bilateral investment protection agreement between the two countries had already entered into force in 2002.
President Lee cited semiconductors, aerospace, and electric vehicles as key areas for industrial cooperation. In particular, he emphasized the potential to combine Mexico’s automotive industry and supply chain with South Korea’s competitive edge in batteries and electric vehicle components. He also cited Kia’s investment in an electric vehicle production facility in the state of Nuevo León as an example of bilateral cooperation.

◇“If Fighter Jet Modernization Proceeds, the FA-50 Will Be the Foundation for Cooperation”
In the defense sector, President Lee’s direct mention of the FA-50 suggested that negotiations regarding fighter jet exports between the two countries are underway. President Lee stated, “If the Mexican Air Force proceeds with its fighter jet modernization project, South Korea’s FA-50 could serve as the foundation for mutually beneficial cooperation based on its performance and price competitiveness.” He added that this could lead to future technology transfer and local production, thereby contributing to the strengthening of Mexico’s industrial base and the creation of jobs.
South Korea has currently signed export contracts for its domestically produced T-50 series aircraft, including the FA-50, with six countries: the Philippines, Indonesia, Thailand, Iraq, Poland, and Malaysia. Poland signed a contract in 2022 to acquire 48 FA-50s, and the Philippines placed an additional order for 12 FA-50s last year based on its existing operational experience. If cooperation with Mexico materializes, it could serve as an opportunity to expand the export market to Central and South America, following Asia and Europe.
In the space sector, he proposed joint projects involving satellites and launch vehicles, while in the field of artificial intelligence (AI), he suggested joint pilot projects and expanded technological cooperation. He explained that since Mexico is utilizing AI to innovate public services and transform its manufacturing sector, and South Korea is also pursuing AI-based industrial transformation, the two countries can work together to create new demand and markets. However, President Lee did not disclose Mexico’s decision to acquire the FA-50 or any specific contract plans during the interview.
President Lee also proposed joint ventures in the satellite and launch vehicle sectors, as well as joint pilot projects and expanded technological cooperation in the field of artificial intelligence (AI). He explained that by combining the two countries’ AI policies and industrial capabilities, they could create new demand and markets.
Regarding energy supply chains, he noted that when concerns over crude oil supply grew due to instability in the Middle East earlier this year, South Korea consulted with Mexico to diversify its sources of supply and was able to increase crude oil imports thanks to Mexico’s cooperation. President Lee reaffirmed the trust between the two countries, quoting the saying, “You know who your true friends are in times of trouble.”
He also proposed strengthening cooperation between the two countries’ public safety authorities to combat transnational crimes such as online fraud, human trafficking, and drug smuggling.