By Luize Ferreira (Fraunhofer IPK)
“Bilateral trade between Mexico and the EU have more than tripled in the past 20 years, making the EU Mexico’s second-biggest export market. Mexico was also the first partner country to create a complementary funding for Mexican researchers to join successful projects of Horizon 2020.”
Mexico is the 16th-largest economy and the largest Spanish-speaking country in the world. Mexico has generally enjoyed slow, but stable economic growth since the 1990s. Its USD 1.29 trillion economy is the second-largest in Latin America, and the country maintains deep trade and investment ties with the United States. Mexico remains an upper–middle-income member of the G-20 and OECD with a per capita GDP of USD 10,040 (ITA, 2022).
Trade relations between the EU and Mexico are governed by the trade pillar of the EU-Mexico Global Agreement. The Agreement came into force in 2000 and covers political dialogue, trade relations and cooperation. The Global Agreement’s trade provisions later developed into a comprehensive Free Trade Agreement, covering trade in goods and trade in services. This modernisation will bring the trade and investment framework into the 21st Century on a basis of reciprocity and promotion of new opportunities for business, while including strong and clear commitments on human rights, sustainable development and the fight against corruption. (European Commission, 2020)
By 2020, bilateral trade had more than tripled and the EU became Mexico’s second-biggest export market after the US. Mexico is also the EU’s second biggest trading partner in Latin America after Brazil. The EU’s key imports from Mexico are machinery and appliances, transport equipment, optical/photographic instruments, and mineral products. Key EU exports to Mexico include machinery and appliances, chemical products, transport equipment, and base metals. In terms of services, EU imports from Mexico are dominated by travel and transport services. While Mexico imports from the EU business services, transport services, travel services, and telecommunications, computer and information services. As for foreign direct investment, the EU is the second largest investor in Mexico after the US. (European Commission, 2020)
Mexico is considered to be at the leading edge of Latin America in terms of innovation in business modelling, with a mature tech sector installed in clusters across Mexico City, Monterrey and Guadalajara. Furthermore, it has a second tier of smaller cities housing start-ups that apply technology to a number of sectors, from automotive, aviation and banking, to renewable energy and urban mobility. However, the country’s investment in research and development (R&D) is below the global average – 0.3% of the country’s GDP in 2020, according to the World Bank. The private sector looks set to take the lead in R&D investment, with the government announcement of a 13.6% cut to the 2019 budget for science and technology. Moreover, a legislative proposal for a new federal science and technology law is being studied. The reform will change the way policies are designed and implemented. It is also intended to spur investment and secure investor confidence (Oxford Business Group, 2019).
Economic Forecast
Mexico’s GDP contracted by 8.2% in 2020 due to pandemic-induced closures, its lowest level since the Great Depression, but Mexico’s economy rebounded in 2021 when it grew by 4.8%, driven largely by increased remittances (World Factbook, 2022). Despite global headwinds related to ongoing COVID-19 linked supply chain disruptions, inflation, and geopolitical instability, Mexico’s economy is recovering and expected to achieve low but steady levels of growth in 2022 and beyond driven in large part by external demand (ITA, 2022).
Informal workers, women and youth were particularly hit, exacerbating long-standing social challenges. Mexico’s solid macroeconomic policy framework safeguarded macroeconomic stability. But medium-term growth prospects have weakened and growth over the past two decades has been low. Poverty rates and regional inequalities remain high. Informality, financial exclusion or corruption have hindered productivity growth. Low female participation rates and weak investment since 2015 have also impacted medium-term growth prospects. Maintaining and strengthening Mexico’s solid macroeconomic policy framework is key for stability (OECD, 2022).
Mexico’s Science Technology and Innovation (STI) Landscape
On behalf of the foreign ministry, the Mexican National Council on Science and Technology (CONACYT) is the coordinating and funding authority for science and technology cooperation. The 2002 Science Act turned CONACYT into an independent authority reporting directly to the president (International Bureau, 2022).
The Deputy Directorate for Scientific Development (DADC) designs, organizes, and implements support policies and programs to promote and strengthen basic science research; It also promotes projects focused on solving major national challenges and priorities through 10 National Strategic Programs (Pronaces) which articulates transdisciplinary groups in National Research and Advocacy Projects (Pronaii) (CONACYT, 2022).
In 2004, the Bilateral Agreement for S&T cooperation between the European Commission and CONACYT was signed aiming to develop common principles and adequate framework conditions for researchers from Mexico and the EU to cooperate with each other. In 2014 Mexico was the first partner country to create a complementary funding called CONACYT-Horizon 2020 for financing Mexican partners in successful projects of Horizon 2020. In this respect, Mexico will continue financing within budgetary possibilities, Mexican institutions and researchers participating in the Horizon Europe research programme (European Commission, 2022).
CONACYT coordinates the system of Public Research Centers, made up of 26 nationally and internationally recognized institutions; strengthening the scientific community through the various calls for scholarships. Some of the centres are listed below (CONACYT, 2022):
- CIATEC, Centro de Innovación Aplicada en Tecnologías Competitivas
- CIATEQ, Centro de Tecnología Avanzada
- CICY, Centro de Investigación Científica de Yucatán
- CIDESI, Centro de Ingeniería y Desarrollo Industrial
- CIDETEQ, Centro de Investigación y Desarrollo Tecnológico en Electroquímica
- INECOL, Instituto de Ecología
- INFOTEC, Centro de Investigación e Innovación en Tecnologías de la Información y Comunicación
National Science Technology and Innovation priorities
For the period 2019-2024, the National Development Plan (Plan Nacional de Desarrollo, PND) provides general orientation to the national science and innovation policy, while the Special Programmes for Science, Research and Innovation (Los Programas Nacionales Estratégicos, PRONACES) indicate key research and innovation policy objectives on specific national issues, such as increasing knowledge transfer and improving regional development and a far-reaching transformation of society. The 10 priority topics of PRONACES – such as protection of the environment, water supply, urban development and strengthening democracy – are now considered priorities for funding future research projects and scholarships (International Bureau, 2022).
In terms of joint priorities, it was decided during the 10th meeting of the EU-Mexico Joint Science and Technology Committee, in 2020, that both sides would strengthen research and innovation capacities in (European Commission, 2022):
- marine research
- health (including Covid-19)
- renewable energies
- sustainable cities
- human capital development
Previous contribution in Horizon 2020
The EU has bilateral agreements with 20 individual countries around the world. These agreements are based on common interests and priorities, aiming to increase cooperation in research and innovation. Mexico is included in the list.
In total 92 Mexican organisations were involved in Horizon 2020 projects with a total of 988,3K Euro funding received by the project’s participants. Structured by thematic priority, projects were conducted mainly within the frame of (Horizon 2020 Dashboards, state of December 2022):
The three major organisations in terms of received funding were the Centro Nacional de Mejoramiento de Maiz y Trigo (342,5k Euro), Universidad de Guadalajara (220,13k Euro) and Centro de Investigación Científica de Yucatán (199,85k Euro). The main collaboration links with European Countries are Spain with 209, France with 159 and Italy with 128 collaborations (Horizon 2020 Dashboards, state of December 2022).
Funding opportunities in Horizon Europe
Horizon Europe is the biggest EU research and innovation programme ever with €95.5 billion of funding available over 7 years (2021 to 2027). It is open to the world. This means that participants from all over the world can participate in most calls. In many cases, the EU will fund at least partly the participation of the international partners. Most LAC countries, including Mexico, are also eligible for EU funding as per the Horizon Europe participation rules. The list of eligible countries can be consulted in the Funding and Tenders Portal.