RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/57
20 October 1998
(98-4050)
Council for Trade in Services Original:  English
COMMUNICATION FROM THE UNITED STATES
Tourism Services
The attached paper has been received from the delegation of the United States with the
request that it be circulated to the Members of th e Council for Trade in Services to assist in the
discussion on Tourism Services in the context of the information exchange programme.
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GROWTH OUTLOOK AND BENEFITS OF LIBERALIZATION
Trade in tourism services is one of the largest and fastest-growing components of trade in
services,  and tourism is the world’s largest employer.  As noted by the WTO Secretariat, tourism
ranks in the top five export categories for 83 per cent of countries; importantly, most of these exportsare generated by private sector participants that are small - and medium -sized businesses.  The ability
to supply tourism services is highly dependent upon infrastructure improvements and therefore should
continue to grow given the increased commitments of WTO Members, including emerging
economies,  to liberalize and improve access for basic sectors such as transport, telecommunications,
energy, etc.  Tourism services  are increasing especially rapidly in the emerging economies, which
benefit from low cost labor, and can use tourism as a springboard to attract foreign investment and to
cement diversified economic growth.  Growth in to urism also stimulates demand for goods, including
primary and food products, for which the emerging economies maintain a competitive advantage.
The United States economic data on trade in tourism include both cross-border trade and
affiliate trade.   According to official U.S. trade data, in 1997, U.S. cross-border exports of travel and
tourism services (that is, travel of foreigners to the U.S. to consume tourism services) reached almostUS$ 73 billion, more than one-quarter of total U.S. services exports.  And these figures do not include
passenger fares, which are recorded as part of transportation services. In 1997, U.S. cross-border
imports of these services (travel of U.S. citizens to foreign markets for tourism) reached almost
US$ 51 billion.  Travel and tourism services sold through U.S. majority-owned foreign affiliates
(figures are limited to the lodging - hotels, motels , etc. - industry) reached US$ 2.9 billion in 1996;
U.S. purchases from foreign-owned affiliates based in the United States reached US$ 6.8 billion over
the same time period.  The U.S. also is an exporter and importer of tourism services provided
cross-border through electronic means (including travel and tour agency services provided via the
internet) although we do not have statistics on this activity.
POSSIBLE AREAS FOR FUTURE DISCUSSION AND WORK
o The U.S. is giving increased scrutiny to the ways that WTO Members have chosen to record
commitments for tourism services, both under the W/120 definition of tourism and under
other W/120  tourism-related sectors, including business services; distribution services;
transport services; and recreational, cultural and sporting services.  We need to make sure thatS/C/W/57
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the full and evolving extent of business activity  is being captured.  But we also need to avoid
duplicating or undercutting commitments in other sectors.  We would welcome an exchange
among WTO Members on this topic.
o According to the Secretariat’s analysis, 112 WTO Members have made commitments on
tourism under the GATS, which is greater than for any other services sector.  However,
restrictions remain in all four modes of supply.
o For example, only 49 per cent of WTO Members making commitments include full market
access for mode 2 - consumption abroad.  We would like to hear the rationale for these
remaining restrictions and more information on how they actually are administered.
o Significant mode 3 - commercial presence restrictions, including limitations on foreign
equity, needs tests, citizenship requirements and restrictive licensing, remain and would seem
good targets for further liberalization.
o And the relative dearth of commitments for mode 1 - cross border should be revisited, given
the enormous liberalization and upgrading of WTO Members’ telecommunications
infrastructures and the growth of electronically provided tourism services (including travel
and tourism services such as on-line reservations and bookings) via the internet.
o Finally, mode 4 - horizontal restrictions on movement of persons - should be reviewed.o We also urge WTO Members to review their system for developing, announcing and applying
laws and regulations pertaining to tourism and travel to ensure that they meet GATS
requirements for transparency and domestic regulation.
U.S. REGIME
In the Uruguay Round, the United States included commitments for tourism and travel related
services under the categories of “hotels and restaurants,” “travel agencies and tour operators,” “tour
guide services,” and an “other” category.  The U.S. provides full market access and national treatment
for cross-border and consumption abroad of these services.  The U.S. provides full market access andnational treatment for commercial presence to provid e these services, with the exception that official
(non-commercial) tourism offices are not permitted to operate on a commercial basis in the U.S., and
that the number of concessions for tour guide services provided in government facilities (for example,
national and state parks)  is limited.  Movement of persons is  governed by the horizontal provisions
of the schedule.
REMARKS ON SECRETARIAT PAPER/QUESTIONS FOR DISCUSSION
Page 3, paragraph 9: For our background information, it would be helpful to have a more
specific understanding of the World Tourism Organization’s suggestions regarding changes to the
current GATS definition of tourism services.S/C/W/57
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Page 9, question for discussion: While we welcome maximum transparency on the part of
WTO Members regarding the provision of information on tourism regulations not mentioned in
schedules, the burden of an open-ended collection of additional data might not justify the eventual
benefits.  If the regulations constitute market access or national treatment restrictions, or are
inconsistent with Article VI, they should be recorded in schedules as such.  Otherwise, we wouldexpect WTO Members to abide by the provisions of the GATS, including articles on transparency and
domestic regulation, regarding these regulations.
Page 10, questions for further discussion:  We are not convinced that a separate annex for
tourism services is necessary.
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