MEXICO AND SPAIN ANNOUNCE PILOT GUEST WORKER

UNCLAS SECTION 01 OF 03 MEXICO 005485

SIPDIS

SENSITIVE
SIPDIS

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TAGS: ELAB ECON CVIS SOCI PGOV PHUM PINR MX
SUBJECT: MEXICO AND SPAIN ANNOUNCE PILOT GUEST WORKER
PROGRAM


1. SENSITIVE BUT UNCLASSIFIED


2. (U) Summary: On October 15, the governments of Mexico
and Spain announced the establishment of a pilot program that
would allow businesses in either country to contract an
unlimited number of guest workers. According to the GOM,s
Secretary of Labor, the pilot program will begin in January

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of 2008 and will last for one year. The program, which will
be administered by the Labor Ministries of both countries,
places no restrictions on the types of employment open to the
quest workers. No details were provided on how this pilot
program will compliment or conflict with Spain,s employment
related commitments to the European Union or how Spain,s EU
partners will view a potential influx of Mexican guest
workers. In his remarks during the announcement of the pilot
program, Mexico,s Secretary of Labor made a thinly veiled
criticism of the US when he commented that building migration
agreements was much more effective than building walls. Most
media observers described the pilot program in highly
positive terms. However, at least a few described the
agreement as further recognition by Mexican President
Calderon that his 2006 campaign promise of generating good
jobs for Mexicans in Mexico is a long-term prospect, and in
the meantime Mexicans will still need to immigrate. End
Summary.


PILOT GUEST WORKER PROGRAM
--------------


3. (U) On October 15, within the context of their VIII
Bi-national Commission, the governments of Mexico and Spain
announced the establishment of a pilot guest worker program.
The program, which Mexico at least, announced to considerable
fanfare, is expected to begin in January 2008 and will last
one year. According to public announcements made by
Mexico,s Secretary of Labor, during the year the program
will operate, businesses in either country will be able to
contract an unlimited number of guest workers. Reportedly no
restrictions of any kind will be placed on the types of
employment open to the two countries, guest workers. As
publicly described, employers from either country will be
able to recruit qualified workers from each other,s labor
market. However, realistically speaking, most of those
seeking employment via the pilot program will be Mexicans
looking for work in Spain and not the other way around.


4. (U) The program itself will be administered by the Labor
Ministries of both countries. Once the program begins
operating employers seeking guest workers will contact their
countries, respective labor ministries providing the
particulars of the number and qualifications of the employees
they are seeking. The labor ministries will then relay this
information to their counterpart in the other country. The
receiving labor authorities will then be responsible for
finding and screening suitable candidates for the available
positions. The cost of traveling to Spain (or occasionally
Mexico) will be paid by the perspective worker with some
limited assistance from his/her government. The cost of
returning the worker to their home country will be paid by
the employer.


THE FINE PRINT (OR LACK THEREOF)
--------------


5. (U) In announcing the program Mexico,s Secretary of
Labor, Javier Lozano, pointed out that legally speaking the
agreement documents were actually a declaration of intent.
Although Lozano told the Mexican press that the program would
begin in January 2008, the written articles of the agreement
do not give an actual starting date; the document simply
indicates that the program will run for one year. Lozano
also stated that the program would be open to Spanish as well
as Mexican workers but the actual agreement reportedly makes
no specific commitment to allow Spaniards to work in Mexico.
Nor does the document address in any way how this pilot
program will compliment or conflict with Spain,s employment
related commitments to the European Union or how Spain,s EU

MEXICO 00005485 002 OF 003


partners will view a potential influx of Mexican guest
workers.


6. (U) Once the fanfare and expressions of good will are
removed the signed agreement states only that: 1)
participation in the program is free (although workers will
have to pay most of their costs of traveling to Spain); 2)
the qualifications needed for employment will be set by the
employer and the length of employment will be negotiated
between the employer and employee; 3) Mexican workers in
Spain will accrue social security benefits that can be
applied toward retirement in either country; 4) Mexican
workers will not be required to depart Spain at the end of
their employment contract and; 5) employers will be
responsible for paying the costs of repatriating guest worker
who wish to return home.


UP WITH SPAIN; IMPLIED RASPBERRIES FOR THAT OTHER COUNTRY
-------------- --------------


7. (U) The Mexican press provided extensive coverage of GOM
Secretary of Labor, Javier Lozano,s, positive assessment of

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the pilot guest worker program with Spain. While clearly
acknowledging that the current agreement was only a pilot
program Lozano also made clear the Mexican government,s
hope/expectation that this would eventually become a
permanent migration agreement. Lozano repeatedly underscored
that agreement would guarantee the rights of guest workers,
ensure fair pay for fair work, further enhance currently
existing agreement with regard to reciprocal social security
and retirement benefits and that it would be driven by the
needs of each country,s private sector with the government
serving only as a facilitator.


8. (U) In his praise of the pilot program Lozano held Spain
and the Spanish government up as examples that other
countries should follow. In what most Mexican press
commentators described as a thinly veiled criticism of the
United States, Lozano then went on to say that when there was
good will, good sense, intelligence and understanding, it was
possible to construct effective agreements instead of
&walls.8 He then closed by congratulating Spain for the
political will and sensitivity to basic human needs that it
demonstrated in concluding pilot guest worker program.


WHAT HAPPENED TO THE EMPLOYMENT PRESIDENT?
--------------


9. (U) During Mexico,s 2006 electoral campaign of now
President Felipe Calderon the theme of job creation was a
constant element of his stump speeches. Calderon promised
that if elected he would become the &Employment President8
working hard to generate more and better paying jobs for
Mexico,s citizens. Job creation, or more accurately the
lack of job creation, is a major issue in Mexico where,
according to the Secretariat of Labor (STPS),the official
unemployment is 3.6 percent. This figure however, is
misleading since official figures make little distinction
between fully employed persons, underemployed person or
persons actively looking for work; all are counted as being
employed. Once these factors are taken into account the real
unemployment rate could be three or four times as high as the
official figures.


10. (U) At the very start of his administration President
Calderon continued to stress the importance his government
would give to promoting job creation; and not just any jobs
but good paying jobs for Mexicans in Mexico. Now however,
less than a full year into the first year of a six year
administration, some labor observers believe he has begun to
back away from his talk of being the &Employment
President.8 President Calderon has publicly acknowledged
that creating high-value jobs is a long-term prospect. In an
October 8 interview with the U.S. news program, &Good
Morning America,8 Calderon explained that current economic
factors will continue to drive out-migration from Mexico, but
the long-term solution is for the Mexican government to

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create high-value jobs in Mexico. He called for orderly
migration to the United States to meet the U.S. need for
labor. Recently, one national media outlet quoted the
President as recognizing that &it is now impossible8 for
his government to create enough employment opportunities so
that Mexican citizens would not have to migrate to the United
States or some other countries. The agreement with Spain is
another example of his acceptance of the idea of continued
mass migration as a near-term solution to problems of
unemployment in Mexico

COMMENT
--------------


11. (U) Despite the prominence the GOM gave the signing of
its agreement for a pilot guest worker program with Spain
there is little evidence that Mexicans are pounding down the
doors to get there. It is almost impossible to say
definitively how many migrants are working in another
country. That said, the only readily available figures on
the number of Mexicans currently working in Spain indicate
that the figure would be somewhere in the tens of thousands
as opposed to the estimated millions presenting working in
the United States. Granted the relative ease of getting to
the US as opposed to getting to Spain is undoubtedly a very
significant factor (as well as the established Mexican
immigrant networks in the U.S.) but it cannot be the only
reason why so many more Mexicans choose to migrate to one
country and not the other. Given the energy and determination
that Mexicans use to enter the US (i.e. tunnels, hazardous
dessert crossings, human smuggling criminal organization,
etc.),the idea cannot be dismissed lightly that if large
numbers of Mexicans wanted to go to Spain they would already
be there.


12. (SBU) As for the position of President Calderon, the
perception in some labor areas is that he has yet to deliver
on his campaign promises to create well paying jobs.
President Calderon,s sluggishness to date in any sustained
attempt to be the &Employment President8 or advance his
&competitiveness agenda,8 does not argue well for any
realistic plan to create good paying jobs here at home for
Mexico,s citizens. The Calderon Administration has
attracted increased levels of foreign direct investment, and
made more progress on tax reform than was made over the past
10 years, but it has not yet made sufficient headway on job
creation in Mexico. Business executives complain that
Calderon,s &competitiveness agenda8 is not moving because
his small number of advisors are focused elsewhere. The tax
reform will not generate sufficient revenue to fund the
infrastructure needed to improve Mexico,s business climate.
Prospects for improving human capital remain dim given the
resistance of the powerful teacher,s union to education
reform (See Mexico 5454). The Calderon Administration is
working to open the Mexican economy to more competition, but
it remains to be seen how he will take on the powerful
oligopolies that have long blocked reforms in key sectors of
the economy. Calderon has made more progress than his
predecessor in tackling the reforms needed to create jobs in
Mexico, but unless he further accelerates reform, he will
continue to rely on the tried and true methods employed by
many of his predecessors. Namely, when all else fails,
encourage the unemployed to seek their fortunes someplace
else other than Mexico.




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