Maldives

Making the WTO relevant to businesses and workers — the example of travel and tourism

Each of the eight candidates to become the next Director-General of the World Trade Organization correctly noted that the WTO’s relevance was at risk without significant reform and the ability to make the three pillars of the multilateral trading system function properly (negotiations, transparency/monitoring, dispute settlement). Some candidates talked about the need for the WTO to take actions that can be clearly seen by businesses, workers and consumers as being relevant to their lives. Most have also talked about the need for the WTO to review how it can provide greater resilience and predictability in the context of a pandemic like COVID-19. Some candidates were also asked questions about how the WTO can be more involved in helping the world achieve the sustainable development goals (SDGs) laid out by the UN in 2015 with a targeted completion date of 2030. Most candidates also commented on the need to improve coordination with other multilateral organizations to see that the capacity needs, financing and other elements often needed for progress on improving integration of smaller and less developed countries into the global trade system are met.

One issue that intersects all of the above needs/concerns is the travel and tourism sector. It is the third largest trade export sector, has been one of the hardest hit sectors globally by the fallout from the COVID-19 pandemic with some 100-120 million jobs at risk this year with the potential closure of hundreds of thousands or millions of businesses – most mciro-, small- and medium enterprises (MSMEs) — and a sector that directly or indirectly is relevant to most of the UN’s SDGs. It is also a sector where there has been a great deal of activity by other multilateral organizations and the U.N.

While travel and tourism is important for nearly all countries, it has an outsized importance for small island developing states (SIDS), least developed countries (LDCs) and many countries in Africa. Thus, an effort by the WTO to prioritize actions that would help restore the international trade dimension of the travel and tourism sector and in a way that is supportive of the actions of other international organizations would have meaningful effects for businesses, workers and consumers globally.

United Nations, Policy Brief: COVID-19 and Transforming Tourism

On August 25, 2020, UN Secretary-General Antonio Guterres released a policy brief entitled COVID-19 and Transforming Tourism. The video of his statement when releasing the study can be found here, https://www.unwto.org/news/un-secretary-general-it-is-imperative-that-we-rebuild-the-tourism-sector (news release with video of statement towards bottom). The press release from the UN World Tourism Organization is copied below (emphasis in original).

UN SECRETARY-GENERAL: ‘IT IS IMPERATIVE THAT WE REBUILD THE TOURISM SECTOR IN A SAFE, EQUITABLE AND CLIMATE FRIENDLY MANNER

“Madrid, Spain, 25 August 2020 – As part of the wider UN response to COVID-19, the UN Secretary-General António Guterres released today a thematic brief on the impact the pandemic has had on tourism. Drawing on the latest data from the World Tourism Organization (UNWTO), the lead author of the publication, it warns that as many as 100 million direct tourism jobs are at risk, and the massive drop in export revenues from tourism could reduce global GDP by as much as 2.8%. The brief stresses that tourism is an essential pillar of the SDGs and the most vulnerable workers and nations at greatest risk.

“Tourism has been among the hardest hit of all sectors by COVID-19 and no country has been unaffected, with restrictions on travel and a sudden drop in consumer demand leading to an unprecedented fall in international tourist numbers.

“The ‘COVID-19 and Transforming Tourism’ Policy Brief from the Secretary-General of the United Nations, António Guterres, makes clear the impact that the pandemic has had on global tourism and how this affects everything from jobs and economies to wildlife conservation and the protection of cultural heritage.

“Mr Guterres said: that ‘It is imperative that we rebuild the tourism sector‘ in a ‘safe, equitable and climate friendly’ manner and so ‘ensure tourism regains its position as a provider of decent jobs, stable incomes and the protection of our cultural and natural heritage’. The UN Secretary-General further underscored that tourism is one of the world’s most important economic sectors, providing ‘livelihoods to hundreds of millions more’, while it’“boosts economies and enables countries to thrive’, and at
the same time allowing ‘people to experience some of the world’s cultural and natural riches and brings people closer to each other, highlighting our common humanity’.

“The Brief warns that the impacts of the pandemic on tourism are already placing conservation efforts in jeopardy. Citing case studies from around the world, it warns that the sudden fall in tourism revenues has cut off funding for biodiversity conservation and, with livelihoods at risk in and around protected areas, cases of poaching and looting are expected to rise. Again, the impact on biodiversity and ecosystems will be particularly critical in SIDS and LDCs. Furthermore, with 90% of World Heritages Sites having closed as a result of the pandemic, both tangible and intangible heritage is at risk in all parts of the world.


Five points priorities moving forward

“UNWTO Secretary-General Zurab Pololikashvili said: ‘Tourism touches on nearly every part of our societies and is a cornerstone of growth and employment, both in developed and developing economies. The United Nations Secretary-General echoes the five key priority areas that UNWTO has identified for tourism to return and drive wider recovery, and both governments and the private sector now have a duty to put this plan into
action.’

“The Policy Brief notes that women, youth and workers in the informal economy are most at risk from job losses and business closures across the tourism sector. At the same time, destinations most reliant on tourism for jobs and economic growth, including SIDS) and Least Developed Countries (LDCs) are likely to be hardest hit, including through an anticipated fall in foreign direct investment (FDI).

“In addition to calling for strong support for the sector in mitigating these massive impacts, the Brief stresses that this crisis represents an opportunity to rethink tourism, including how it contributes to the SDGs. To this end, the Policy Brief provides Five Priorities for the restart of tourism, all aimed at ensuring a more resilient, inclusive and carbon neutral sector. These priorities are:

“1. Mitigate socio-economic impacts on livelihoods, particularly women’s employment and economic security.

“2. Boost competitiveness and build resilience, including through economic
diversification and encouragement of MSMEs.

“3. Advance innovation and digital transformation of tourism

“4. Foster sustainability and green growth

“5. Enhanced focus on coordination, and responsible leadership

“Alongside penholder UNWTO, a further 11 United Nations agencies contributed to the Policy Brief, highlighting the sector’s unique importance and outreach.”

The policy brief is embedded below.

SG-Policy-Brief-on-COVID-and-Tourism

There are a set of slides that lay out what is at stake for the world from the impact of COVID-19 on tourism. International tourist arrivals are down 56% in the January – May time period for the world, with the range by region being between 47% (Americas and Africa) and 60% (Asia and the Pacific). The loss in revenue in five months was US$320 billion with an annual projection of lost revenue from US$910 billion to US$1.2 trillion. The most optimistic projection has international tourism revenues declining to a level last seen in 2003.

The small island developing states (SIDS) and least developed countries (LDCs) most at risk include 21 which have international tourism exports accounting for 50-90% of total exports of goods and services and an additional 20 countries where international tourism exports are between 30 and 50% of total exports of goods and services. Macao (China), Palau, Bahamas, Saint-Lucia, Maldives, Turks and Caicos, and Aruba are all 80% or higher; St. Maarteen and Anguila are 70-79%; Cabo Verde, Antigua & Barbuda, Sao Tome & Principe, Barbados, Vanuatu, and Samoa are all 60-69%; Jamaica, Montenegro, Gambia, Fiji, Comoros, and Dominica are all 50-59%; Tonga, Ethiopa, Belize, Lebanon, Montserrat, Georgia, French Polynesia, and Jordan are all 40-49%; and Mauritus, Seychelles, Haiti, Dominican Republic, Bermuda, Albania, St. Vincent & Grenadines, Croatia, Tanzania, Curacao, Grenada, and St. Kitts and Nevis are all 30-39%.

One of slides shows that women make up 54% of the workforce of accommodation and food services supporting the point that women are among the most vulnerable in terms of job security during the pandemic.

The slides are embedded below.

UN-Tourism-Policy-Brief-Visuals

Conclusion

As WTO Members look at their responses to the COVID-19 pandemic in general with a focus on export restraints and other restrictions, consider how trade can speed economic recovery and consider steps that should be taken to reduce the challenges should there be another health pandemic in the future, it is important that the Members consider the travel and tourism sector with a sense of urgency. Cooperation and coordination among WTO Members on when and how to reopen international travel and other needs of travelers, businesses, workers and host governments is obviously critical. Also coordination with the WHO, UNWTO, IMF, World Bank and regional development banks is critical to see that the special needs of SIDS, LDCs and the MSMEs are identified and addressed.