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DE RUEHTU #2465/01 2721458
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FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 1943
INFO RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0800
RUEHAS/AMEMBASSY ALGIERS PRIORITY 7303
RUEHLO/AMEMBASSY LONDON PRIORITY 1187
RUEHNK/AMEMBASSY NOUAKCHOTT PRIORITY 0788
RUEHFR/AMEMBASSY PARIS PRIORITY 1640
RUEHRB/AMEMBASSY RABAT PRIORITY 8229
RUEHTRO/AMEMBASSY TRIPOLI PRIORITY 0401
RUEHCL/AMCONSUL CASABLANCA PRIORITY 4000
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 TUNIS 002465 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/MAG (HARRIS) AND EB/TPP/ABT (LERSTON) 
STATE PASS USTR (BELL AND HEYLIGER), USPTO (ADLIN AND 
ADAMS), USAID (MCCLOUD) 
USDOC FOR ITA/MAC/ONE (ROTH), ITA/OTEXA (DANDREA), ADVOCACY 
CTR (JAMES), AND CLDP (TEJTEL) 
CASABLANCA FOR FCS (ORTIZ) 
LONDON AND PARIS FOR NEA WATCHER 
 
E.O. 12958: N/A 
TAGS: ECON ELAB ETRD BEXP KTEX TS
SUBJECT: TUNISIAN TEXTILE WORKERS FACE UNCERTAIN FUTURE 
 
REF: A. STATE 138090 
 
     ¶B. TUNIS 2418 
 
¶1. (U) Summary: This is the second of a two-part series on 
the Tunisian textile sector.  This cable addresses the impact 
of the end of the Multifiber Agreement on workers.  While 
textile organizations and manufacturers viewed 2005 results 
as better than expected, the reality has been bleaker for 
Tunisian textile workers, who face factory closures and a 
lack of unemployment benefits.  As the sector re-orients from 
labor-intensive textile manufactures to higher-quality, 
value-added products, the number of textile jobs has 
decreased.  The absence of a GOT unemployment system has made 
this transition particularly difficult for Tunisian textile 
workers.  End Summary. 
 
¶2. (SBU)  The textile sector is responsible for nearly 50 
percent of Tunisia's manufacturing employment, or 200,000 out 
of 543,000 manufacturing jobs, according to the Technical 
Center for Textiles (CETTEX).  While CETTEX and the National 
Federation of Textile Employers (FENATEX) presented a 
positive view of the sector's performance in 2005, Tunisian 
Workers' Union (UGTT) Assistant Secretary General Meddahi 
Abdennour stated that the end of the Multifiber Agreement, 
and the accompanying increased competition from cheap Asian 
textiles, had been a "big shock" and had created enormous 
social and economic problems.  Abdennour estimates that 
during the past two years nearly 50 thousand jobs have been 
lost in the textile sector, representing a 20 percent 
decrease since 2004.  Factory closures and lay-offs have 
become a not uncommon occurrence, although still a sensitive 
topic for many manufacturers.  In a meeting with EconOff, 
Amel Bouchamaoui, Director of the Maille Fil textile company, 
reluctantly admitted to "reducing" her company's workforce as 
it lowered yarn production in favor of ready-made garments. 
The absence of any noticeable activity at Bouchamaoui's 
factory contradicted her story, which the factory guard also 
disputed, noting that her factory had stopped production one 
year ago and all 250 workers were let go.  Although Abdennour 
believes that the worst has passed in terms of job cuts, he 
believes that jobs will continue to be lost in the sector as 
less competitive textile producers close their factories. 
 
¶3. (SBU) Faced with strong competition from cheaper Asian 
textiles, minimizing labor costs has become an even greater 
dilemma for Tunisian textile producers.  Employment terms, 
including base wages, for textile workers are negotiated 
every three years by FENATEX, the textile employers' union, 
and the UGTT.  Although FENATEX leadership claimed that the 
relationship between textile employers and laborers is 
harmonious, when EconOff asked about rumored strikes in the 
previous year, Secretary General Ali Nakai reluctantly 
admitted that a few strikes had occurred in 2005 during the 
wage negotiation process.  (Note: Accurate information about 
strikes is not always available in the mainstream Tunisian 
press, which is largely controlled by the GOT.  End Note.) 
However, Nakai remarked that workers understand they face the 
same reality as their employers and therefore, understood it 
was impossible to raise salaries in the current situation. 
 
¶4. (SBU) UGTT Assistant Secretary General Abdennour 
contrasted the amicable vision presented by FENATEX, 
remarking that there had been many strikes during 2005 and 
that the contract negotiations had been particularly 
difficult.  According to Abdennour, the 2005 contract 
negotiations took over six months to complete -- far longer 
than the negotiations that occurred for other sectors-- and 
required the intervention of the Ministry of Social Affairs. 
The sticking points were two employer demands: one to pay 
workers for hours of effective work, a provision that would 
allow employers to retain employees while only employing them 
(and paying them) when necessary; the second to retain the 
same wage structure negotiated during the 2002-2004 contract. 
 While the UGTT was able to prevent the adoption of the 
 
TUNIS 00002465  002 OF 002 
 
 
effective work measure, they were forced to accept only a 
token wage increase over the 2002-2004 contract. 
 
¶5. (SBU) Abdennour noted that the absence of any GOT 
unemployment benefits has become a serious problem for 
textile workers.  In general, those who lose their jobs after 
the age of 50 are eligible to begin receiving their 
retirement benefits from the GOT.  All other workers receive 
only a one-time indemnity payment which is determined by the 
number of years of employment multiplied by the number of 
days wages specified by the contract, which might be as 
little as 15 days per year of employment.  Although the 
contract requires this payment in order to lay off workers, 
Abdennour cited many examples where employers, particularly 
foreign employers, closed their factories without paying 
their workers.  In several cases, workers occupied factory 
premises until receiving an indemnity payment.  Abdennour 
cited one factory where 200 female employees have lived for 
7-8 months after the owner closed the factory without final 
payments.  In cases in which foreign employers depart 
Tunisia, the workers and UGTT often have little recourse. 
However, in one case, the UGTT was able to collect an 
indemnity payment for the Tunisian employees of a departed 
French employer after a French union ordered a strike at the 
employer's Marseilles factory on their behalf. 
 
¶6. (SBU) Comment: Although the GOT and textile manufacturers 
have adopted a sound strategy for maintaining future 
competitiveness, the move away from labor-intensive textile 
products to value-added production will continue to have a 
strong and negative impact on employment in the textile 
sector.  Given the high overall unemployment rate in Tunisia, 
officially 14.2 percent, the lack of GOT unemployment 
benefits and the failure of some employers to provide 
termination payments will continue to create social 
dislocation for the near future.  End Comment. 
BALLARD