In a sign of stronger diplomatic and business relations with Central and South America, Israel and Mexico signed over the weekend a cooperation agreement for industrial research and development.

Under the deal, Israeli and Mexican companies will receive assistance in funding joint projects in several areas of research and development, including water management, desert agriculture, pharmaceutical and medical devices, electronics and communications.

The agreement was led by Mexico’s CONACYT (Consejo Nacional de Ciencia y Tecnología) and its Israeli counterpart, the Office of the Chief Scientist (via MATIMOP, the Israeli Industry Center for R&D), and was signed by Israeli Ambassador to Mexico Rodica Radian Gordon, and the Israeli Ministry of Economy’s trade attaché to Mexico, Rona Kotler Ben Aroya.

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The agreement comes after Israel was admitted in 2012 as an observer in the Pacific Alliance trade bloc, which Mexico, along with Colombia, Peru and Chile, is a member of. The combined GDP of Pacific Alliance nations is approximately $3 trillion and constitutes 40% of Latin America’s GDP. If they were a single nation, the Pacific Alliance countries would form the world’s sixth biggest economy, according to the World Bank.

Israeli officials who have been working on deals with Latin American countries believe that there is a great demand for Israeli technology and expertise in a wide variety of fields.

“We are delighted with Mexico’s vote of confidence in Israel’s economy, industry and innovation, which have long been global brands,” said Israeli Chief Scientist Avi Hasson. “Cooperation agreements such as the one signed with Mexico contribute to the Israeli market by creating new jobs, advancing R&D, technological enterprise and more.”

Among the Israeli companies already working in the region is Frutarom, one of the biggest companies in the flavorings and fragrances industry. Frutarom in October acquired the flavors and natural food colors division of Peru’s Montana Foods in a $35 million deal, at the same time taking on Montana’s Chile operations as well.

With the new agreement, Israel and Mexico will early next year issue a call for Israeli and Mexican companies to present joint proposals for parallel funding for R&D projects.