The tourist industry has both costs and benefits for countries which choose to seek the tourist dollar. Good governance of the industry involves optimising the benefits to local people and the economy, while minimising social, environmental and cultural costs. However, the ability to regulate in this way could be constrained or even removed by commitments in international trade deals. For example, commitments under the General Agreement on Trade in Services (GATS) at the WTO may make it very difficult for Pacific countries to introduce new regulations to share economic benefits with local communities or to protect the environment because any foreign tourism operator affected by the regulations can ask their home government to complain to the WTO on the basis that the regulations are an unnecessary barrier to trade.
The Vanuatu tourism industry provides a cautionary tale. The following case study
shows that the industry has far more costs and fewer benefits than it should for local people and the Vanuatu economy. Its benefits accrue overwhelmingly to foreign
companies and wealthy expatriate residents, who have taken advantage of Vanuatu’s
current lack of effective regulation to reap fat profits, while leaving the social, cultural and environmental costs to be borne by the ni-Vanuatu. The case study also highlights the rash of land sales on Efate that are enriching real estate agents but leaving ni-Vanuatu landless and with only a small fraction of the land value.