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The economic and trade relations between Pakistan and Malaysia have always been sound but the balance of trade has remained in favor of Malaysia due to value added products. Pakistan is one of the leading buyers of some of the Malaysian products. Pakistan’s major exports to Malaysia are non-value added products. Malaysian side has also shown keen interest for investment in the field of oil exploration in Pakistan. Both the countries have agreed to start negotiations that could lead to free trade agreement. Total trade between both the countries in 2003 was $713 million. Out of which $623 million went to Malaysia and remaining $90 million came to Pakistan. Pakistan and Malaysia trade relations need to be improved so that Pakistan may improve its economic conditions and learn from the experience of Malaysia. We need to understand the nature of trade relations with Malaysia and explain possibilities to find new ways to improve our relations.