WASHINGTON—Illegal immigration may be the single most troubling issue in U.S.-Mexican relations, according to a think tank report released Wednesday.

The Inter-American Dialogues report, “A More Ambitious Agenda,” lists untapped opportunities for the two countries that could accelerate economic growth and increase global competitiveness. The report endorses a “more humane” immigration policy in the United States, suggesting a fresh approach would have a positive impact on the economy in both countries and reduce a major sense of tension between the nations.

The report’s principle author, Peter Hakin, joined a round-table discussion in Washington to analyze the study’s conclusions.

“Creating sensible legislation that grants migrants legal status would contribute enormously to both sides of the border,” said Hakin, former president of Inter-American Dialogues, which focuses on Western Hemisphere affairs. “Measures would translate into higher incomes, better jobs and increased education for migrants and their children.”

The report found that Mexican immigrants contribute roughly four percent a year to U.S. GDP and sent more than $20 billion back to Mexico in 2011, a number equivalent to nearly half the value of Mexico’s oil exports.

The think tank’s commission recommended two crucial elements be included in an immigration reform package: a temporary guest worker program and amnesty to all unauthorized, but law-abiding migrants currently living in the U.S. These measures would help increase tax payments to local, state and federal governments and secure a more highly skilled U.S. work force.

Former Arizona Rep. Jim Kolbe said he was disappointed in that President Barack Obama’s recent immigration speech in Las Vegas was silent on the need for guest worker programs.

“It was not an encouraging start to this debate,” the former House Republican said. “I don’t think anyone should be breaking out the champagne as we have a long ways to go.”

Panelists also considered the positive effects of establishing a special bilateral arrangement governing the two countries’ cross-border migration flows. Immigrants of Mexican nationality would be subject to a special set of rules directed at easing U.S. entry and legal employment. Such an idea could spur a more cyclical, rather than one-way, migration pattern, according to the report.

“We could make our two governments so much more efficient if we harness ourselves and march in the same direction,” said Carla Hills, U.S. trade representative under the first Bush administration.

While the U.S. political scene sometimes fixates on the negative effects of illegal immigration, including job competition, lower wages and crime rates, Mexicans are concerned with their compatriots’ treatment, rights and futures in the U.S. Humane reform not only yields positive economic returns, but also increased understanding and amiability between the two nations, Hakin said.

Former Mexican president Ernesto Zedillo, a member of the commission, endorsed the report, but was not present at the event. “A More Ambitious Agenda” will be presented to government officials in Mexico City Thursday.