TUNISIAN TEXTILE WORKERS FACE UNCERTAIN FUTURE

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