Tourism, Appendix 2: Policy statement on the GATS agreements in the hotel-restaurant sector, Malmö – 18-20/06/2001


Malmö, 18-20/6/2001

Item 11: Tourism
Appendix 2: Policy statement on the GATS agreements in the hotel-restaurant sector


The General Agreement on Trades in Services (GATS) is a series of multilateral rules governing international trade in services. This agreement was negotiated during the Uruguay Round that led to the Marrakech Agreements, which form the basis of the World Trade Organization (WTO). The GATS came into force on January 1, 1995 and negotiations shall be held not later than 2001 for the gradual dismantling of restrictions. All WTO Member States have signed the GATS.

The GATS is predicated on a number of basic principles:

    • Most-favoured nation treatment for all services, with possible exemptions;
    • Equality of treatment for foreigners and nationals, with authorised exceptions;
    • Transparency of national regulations;
    • Commitment by Member States to open markets and access to those markets.

GATS covers four types of provision:

    • Trans-border provision (provision of a service from one country into another);
    • Foreign consumption (use of a service by consumers or businesses in another country);
    • Commercial presence (establishment of subsidiaries to provide services in another countries);
    • Physical presence (use of expatriates to provide services in another country).

127 countries signed the GATS on April 15, 1994 in Marrakech. Only eight signatory countries (Mozambique, Brunei, Bahrain, Madagascar, Barbados, Belize, Cyprus and Maldives) have not provided a schedule of commitments outlining their national rules of trade for the hotel and restaurant sector.

IUF position

This policy statement considers the tourism sector essentially from the point of view of the workers employed in the hotel-restaurant sector

    • Since 1994, no assessment of the impact of the liberalisation of trade in the tourism sector has been performed. It therefore appears premature and potentially dangerous to proceed further in this direction without measuring the impact of the commitments made in Marrakech on the economy and the tourism sector, especially in developing countries.
    • The development of tourism can have a very real impact on local populations, both positive and negative: job creation and increase in local industrial and/or agricultural production on the one hand, forced displacement of people and forced labour on the other hand. In the course of GATS negotiations, the views of these populations should be expressed and their interests defended by their natural representatives: trade unions and non-governmental organisations should be involved in the GATS negotiations . The GATS negotiation process should be transparent and public opinion provided with real time information about the evolution of the negotiations.
    • Too much tourism kills tourism. The liberalisation of trade through GATS should be pursued from the perspective of sustainable tourism , sole guarantee for the lasting stability of the tourist activity.
    • The accelerating development of new information technologies (centralised reservation systems, Internet) creates an imbalance between industrialised and developing countries. These systems, controlled by transnational corporations, encourage business with companies from industrialised countries and may impact the performance of tourism companies (local airlines, hotels and restaurants) in developing countries. IT companies’ access to national markets should be subject to technology transfer and local staff training obligations.
    • The liberalisation of the tourism trade has resulted in the privatisation of hotels, especially in developing countries. This privatisation has been accompanied by the arrival of transnational hotel corporations, which have imposed their management and work organisation practices.

Government should give themselves the means to control and limit, based on need, the activity of transnational corporations and the transfer of capital. They should ensure that the privatisation of hotels does not serve as an excuse to reduce employment levels and increase the casualisation of work, for example through an uncontrolled increase in the use of sub-contractors.

Tax or other incentives for the establishment of companies in a given country should be predicated on adherence to minimal social and environmental standards.

    • Hotel and restaurant activities have a tendency to develop through franchise or management contracts, allowing transnational corporations to build extensive chains without having to assume direct management responsibility. It would be desirable for the management and marketing constraints imposed by the franchise agreement to be associated with common industrial relations obligations for the whole of a hotel or restaurant chain, regardless of the management structure of each establishment.
    • Governments should retain land use control and prepare development plans balancing tourist and other forms of economic activity. The transformation of agricultural land into recreational areas (i.e., golf courses) may in the long term jeopardise the balanced development of an entire area. The development of plans for balanced tourist development should proceed only after consultation with all stakeholders: public authorities, private corporations, trade unions and local population representatives. The rights of indigenous people and respect for their culture should also be central issues in the preparation of a tourist development plan.
    • The right to ownership and commercial exploitation of natural sites should be subject to limits and controls . Governments should guarantee universal access to national parks and sites. Conversely, they should be allowed to restrict or forbid access to tourist sites where commercial exploitation entails severe risks to the natural or cultural environment or their preservation.
    • Government should have the power to define the conditions for the establishment of hotel or restaurant companies in their countries. They must especially be able to determine the origin of the funds invested, the identity of the owners of such companies and the professional capacity of their managers.
    • Employers should not use the right to free movement of workers as a means to escape industrial relations responsibilities in effect in the host country. Employment and working conditions for foreign workers should not be lower than those provided to local employees, even when the employer is based outside the country. The right to free movement of workers should be subordinated to the guarantee of minimum labour standards, and especially to compliance with and application of ILO conventions on trade union rights, collective bargaining, forced labour and the elimination of the worst forms of child labour. ILO Convention No. 172 and Recommendation No. 179 on working conditions in hotels, restaurants and related establishments should form the minimum basis for the rights of workers of the sector in all countries.
    • The right of free movement should be able to be limited when it is used to allow or encourage sexual tourism, and especially the sexual exploitation of children for commercial purposes. The governments of both the destination and originating countries should be pressed to enact laws punishing the sexual exploitation of children for commercial purposes by tourists and providing for criminal proceedings against the offenders, even in their home countries.
    • The liberalisation of the tourism trade should proceed in compliance with the Berlin Declaration on bio-diversity and sustainable tourism (1997), which states in Section 8 that tourism should be developed in a way so that it benefits the local communities, strengthens the local economy, employs the local workforce and wherever ecologically sustainable, uses local materials, local agricultural products and traditional skills. Mechanisms, including policies and legislation should be introduced to ensure the flow of benefits to local communities.
    • The development of the tourist trade must proceed in compliance with multilateral agreements on environmental protection , including the Framework Convention on Climate Change (FCCC, 1992), the Convention on International Trade in Endangered Species (CITES, 1992) and the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matters at Sea (London Dumping Convention, 1972).
    • Governments must be able to ensure that the liberalisation of the tourism trade is not used as a pretext for a deterioration in safety standards , and must when warranted be able to ban any form of transport or leisure activity that does not meet acceptable safety standards.