Thursday, March 20, 2014

Eliminate U.S. Tourist Visas?

International tourism is an industry that now involves more than one billion travellers per year and more than $1 trillion per year in total spending. Welcoming more international visitors to spend their vacation dollars in the U.S. is both a plausible way of putting a dent in the U.S. trade deficit and a potential growth industry for new jobs. But international tourism is also an industry where America doesn't really try to compete; indeed, it actively hinders international tourists through its visa requirements.  Robert A. Lawson, Saurav Roychoudhury, and Ryan Murphy consider "The Economic Gains from Eliminating U.S. Travel Visas" in a Cato Institute Economic Development Bulletin (February 9, 2014).  Here's a realistic if hypothetical scenario to set the stage:

"Suppose a reasonably affluent Brazilian family was interested in visiting Disney World in Florida. First they must fill out the DS-160 online application. Then they must pay a $160 application fee per visa and perform two separate interviews, one of which requires invasive questions and fingerprinting. The interviews typically must take place at an American embassy or consulate, of which there are only four locations in all of Brazil–a country as big as the continental United States–meaning that many of the Brazilian applicants will have to travel for the interview. While visas may take only 10 days to process, delays are common, and the United States government recommends not making travel plans until receiving the visa. To make matters even more uncertain, consular officials can stop the process at any moment and deny the family a visa without reason. The Brazilian family could go through that entire lengthy, expensive, and uncertain process or they could go to Disneyland Paris, France, without getting a visa at all. Unsurprisingly, many Brazilian families choose to go to Disneyland in France over the United States."

By their estimates, removing visa requirements completely could triple the number of international tourists in the United States. "Eliminating all travel visas to the United States could increase tourism by 45–67 million visitors annually, corresponding to an additional $90–123 billion in tourist spending."

Of course, there are two main concerns about international tourists: they may be using the tourist visa as a way to immigrate to the U.S., or they may be a terrorist risk.  Lawson, Roychoudhury, and Murphy suggest the possibility of phasing in the removal of travel visas for countries where these issues seem less likely to be important. After all, the U.S. already has a Visa Waiver Program under which people from 37 countries can visit the U.S. for up to 90 days without a visa. They write:
"The United States could phase in tourist visa reciprocity with nations that do not have a history of sending many unauthorized immigrants or that do not present security threats. Tourists from Malaysia, Botswana, Mongolia, Uruguay, and Georgia–nations that do not require Americans to obtain visas before visiting–could be allowed to enter without a visa to begin with, phasing in other nations depending on the success of those liberalizations. If the American authorities grow confident in their ability to limit visa overstays or the possibility of unauthorized immigration is greatly reduced, reciprocity could eventually be phased in with Mexico, Central American countries, and Caribbean nations as well."
Americans need to stop thinking about international tourism as only something where Americans spend money abroad, and start thinking about it as an economic opportunity, too. In a globalizing world economy, the countries that make an effort to be at the crossroads of that economy will have particular advantages.