Travel Reference
In-Depth Information
Annexe to the GATS. Instead, the EC proposed
that the list of sectors proposed to be included in
the annexe were too broad, as well as also not-
ing that air transport services were currently
excluded from the GATS negotiations, and that
some of the issues raised by the sponsors could
be better addressed in the World Trade Organi-
zation's Working Party on Domestic Regulation
(WPDR) (Dunlop, 2003).
Interestingly, Dunlop (2003, p. 10) also
noted that the EC (along with the United States)
suggested that sustainable development needed
to be considered within the annexe, with the EC
stressing 'the importance of access to high-quality
environmental services - a key offensive negoti-
ating interest for the EC (and US) in the GATS
negotiations' which would have significant
impacts in a wide range of countries with respect
to tourism trade with the EU. In addition, the EC
sought to use any annexe to eliminate restrictions
on foreign direct investment in tourism. Although
such measures are likely to favour some of the
wealthier countries in the EU it is also conceiv-
able that if such measures were adopted they may
also be utilized by accession countries in invest-
ing in other countries, particularly to their east,
as well as attracting non-EU foreign investment
in the accession countries themselves.
In addition to multilateral trade negotia-
tions, an enlarged EU also has implications for
bilateral relations with respect to tourism trade
(Greenaway and Milner, 2004). For example,
Caribbean (CARIFORUM) nations regard them-
selves as being at a disadvantage in gaining
access to the distribution channels that place
tourism products on the EU markets (e.g. tour
operators, airlines, computer reservation systems)
(Dunlop, 2003). In particular, the substantial
costs of compliance with EU standards - in the
form of national regulations implementing the
EU Package Travel Directive 43 - are a major
issue for CARIFORUM hoteliers. For example,
some CARIFORUM properties have to intro-
duce elaborate evacuation systems more suited
to high-rise buildings when they have only two
or three floors. Dunlop (2003, p. 34) also noted
that under the Directive the interests of European
consumers received special attention in contrast
with the suppliers of tourism products and services
such as CARIFORUM hoteliers - were not
considered within the scope of the Directive.
For example, there are no provisions to
mitigate the impact on tourism suppliers
in the event that a European tour operator
or travel agent becomes insolvent.
The extent to which accession countries
may serve to influence bilateral relations in
tourism is unknown, but previous history of EU
trade negotiations including CAP would tend to
suggest that the accession countries, as well as
the EU as a whole, would not do anything to
harm their own self-interest despite any rhetoric
surrounding free trade or development.
Issues of trade also affect tourism flows
between the EU and the United States. Although
the transatlantic market is regarded as the 'lead-
ing edge of globalization', the service sector is
regarded as demonstrating substantial potential
for further growth following removal of internal
barriers (Brimmer and Fröhlich, 2005; Hamilton
and Quinland, 2005a). For example, although
Hamilton and Quinland (2005b) fail to acknowl-
edge the role of tourism as a service sector,
Robyn et al . (2005) highlight the potential for
growth in transatlantic tourist flows as a result of
liberalization of transatlantic aviation, and argue
that a single, open transatlantic market for air
transport services could potentially increase
annual passenger traffic by between 4.1m and
11.0m passengers on transatlantic routes, and
between 13.6m and 35.7m on intra-EU routes.
Such a situation would provide for a total increase
of 17.7- 46.7m passengers per year, an increase
of 9-24% in total transatlantic travel, and 5-14%
in intra-EU travel.
According to Robyn et al . (2005) 'con-
sumer welfare' could increase by about 5.2bn
annually, with transatlantic traffic accounting for
just over half of that increase. They argue that
the greatest share (up to 3.8bn annually) would
come from gains to consumers that would not
involve any reduction in airline profits and that
the increased airline revenue would lead to
additional economic output in 'directly related'
industries ranging from 3.6bn to 8.1bn a year.
However, these estimates of economic impact
exclude the potential effects in the leisure and
tourism industries and also exclude the ten
new EU members, and are therefore regarded
as conservative.
Nevertheless, potential changes in the trans-
atlantic aviation market cannot be seen in
isolation and are also likely to be related to
other policy issues including European and
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