A transatlantic tourism tax?

BRUSSELS, Belgium — A $14 tax could be the final straw for Europeans, who have long threatened to retaliate for impositions on European travelers to America.

The European Union has been in a bitter battle with the United States for years to obtain the right for all its citizens to enter the U.S. without a visa, as Americans can do in the EU. Now, citizens of all 27 EU nations except Bulgaria, Cyprus, Poland and Romania have the coveted “visa-waiver” status and the EU vows it won’t rest until all its members do.

But visa-waiver status no longer means eligible travelers can board flights to the States without advance permission. Since January 2009 the U.S. has required visa-free travelers to submit their personal details online into the “Electronic System for Travel Authorization” (ESTA) and receive approval from the Department of Homeland Security before departure.

Homeland Security insists that “ESTA is not a visa,” reasoning that an ESTA approval “does not meet the legal requirements to serve in lieu of a U.S. visa when a visa is required.” While the European Commission, the EU’s executive arm, has initially allowed that ESTA is not officially a visa, it has lawyers analyzing whether it is “tantamount to a visa” and therefore deserving of retaliation.

Earlier this month the U.S. Congress added another flashpoint: The “Travel Promotion Act” will charge travelers from visa-waiver states $10 to enter the U.S., plus $4 to administer the program. The act is an effort to combat an almost 10-percent drop in the number of visitors to the U.S. over the past decade.

British citizen Julia Johnson, an international marketing director who frequently travels to the U.S. on business, said the entire ESTA process makes her feel “put upon.” “I was dismayed the first time I had to make this application,” she said. “It seems to me the Department of Homeland Security is infringing upon our lives, the lives of 'aliens' as we’re called, more and more. And to discover this time that I needed to pay.”

“Fourteen dollars is not an extravagant amount and many would be willing to spend such money,” explained Kloe Tricot, a Belgo-Irish student who will be leading a “model United Nations” team from Belgium to New York in the spring. “The problem isn’t really what we are asked to do, but why we are asked to do it,” she added, saying it looks like the U.S. is either trying to make money off visitors who will be spending plenty anyway or is suffering a “certain security paranoia.”

Despite the transatlantic criticism, the U.S. tourism sector is thrilled. Supporters say the additional Travel Promotion Act-funded advertising will bring in 1.6 million new tourists and therefore, 40,000 new U.S. jobs. “Up to $4 Billion in Economic Stimulus at No Cost to American Taxpayers” trumpets a headline by the U.S. Travel Association.

Marlene Colucci, executive vice president of public policy for the American Hotels and Lodging Association, predicts the additional tourists attracted by new promotion will “spend a projected $4 billion in their visits, [generating] $321 million in tax revenue, helping to reduce the federal budget deficit by $425 million over the next 10 years. This bill will deliver the kind of serious economic growth that the United States needs to experience to pull itself out of this recession.”

The crowing on the U.S. side of the Atlantic is meeting a cold stare from this side. The Travel Promotion Act is illogical, say Europeans, not to mention unwelcoming.

Several members of the center-right European People’s Party, the largest in the European Parliament, issued a harsh response, calling the fee “harassment,” “unjustifiable” and a “burden on transatlantic relations.” “We have to remind the U.S. once again,” the lawmakers said in a statement, “that transatlantic cooperation can only work if both partners are on the same level … . This rip-off is not acceptable.”

“It seems peculiar,” European Commission Vice President Maros Sefcovic said during a debate on the subject in parliament, “that foreigners are requested to pay for promoting tourism to the United States, as this may possibly lead to less — and not more — travel.”

Sefcovic assured lawmakers the commission protested the Travel Promotion Act fee while it was in the works. “The commission also criticized the fact that the fees apply only to travelers under the U.S. visa-waiver program and that therefore it is discriminatory,” he said. Sefcovic promised the matter would remain on the agenda of every EU-U.S. rendezvous.

Nicholas Kralev is a Washington-based writer who recently left a career covering diplomacy to focus on travel writing and passenger advocacy full time. He says the $4 part of the fee is somewhat justifiable because “it costs [Homeland Security] a lot of money to maintain the very complex ESTA network.” “But the $10 ‘tourism promotion’ charge is illogical for most people, including officials at [Homeland Security], who would only admit that in private,” he said, surmising that “it makes political sense for members of Congress.”

Senate Majority Leader Harry Reid, who represents the tourism-dependent state of Nevada, was a powerful proponent of the Travel Promotion Act.

Airlines face a $3,300 fee for allowing passengers on flights without the authorization, but Kralev says the administration of the program is causing huge logistical problems, with people missing flights every day as a result. It’s become such an issue for passengers that Kralev is even starting an online educational program on how to navigate ESTA requirements.

But it’s not just the price or inconvenience of ESTA registration that’s riling Europeans. It’s the gap between American and European sensitivities about the collection of private records.

“If it were only about paying $14, it would not be such a problem,” said Jan Philipp Albrecht of the Greens/European Free Alliance group in the European Parliament. He complained that Homeland Security not only gets the ESTA data but “they also want access to the Passenger Name Records in the travel agencies’ reservation systems, which almost includes information about who is sleeping with whom.”

These transfers of personal data required by the U.S. for all airline travelers are considered by many as a violation of EU privacy rights and are under intense debate and discussion within the EU institutions as well as between Brussels and Washington. The European Commission is working on new proposals for how to handle these requests.

“It gets even more problematic when we recognize that the $14 fee has to be paid with one of the four major credit cards, whose companies are all based inside the U.S.,” Albrecht continued. “I ask myself how you will ensure that those huge data collections will not be the subject of investigations not related to travel operations, at least throughout the duration of the Patriot Act?”

From the U.S. side, those assurances come from Mary Ellen Callahan, Homeland Security’s Chief Privacy Officer and Chief Freedom of Information Act Officer. She wants to provide answers to European concerns, not least in the hopes of building a better rapport with the European Parliament on issues such as Passenger Name Records and ESTA after earlier this year Parliament rejected sharing international banking data with the Americans.

While emphasizing that the Travel Promotion Act fee was imposed by Congress, not her agency, Callahan told Europeans last week that their payments would be secure. “There will be no sharing of the ESTA data with regard to the credit-card information,” Callahan said. “It is retained for one year, but it is considered sensitive information and it is protected.”

But Alexander Graff Lambsdorff, a European Parliamentarian with the Alliance of Liberals and Democrats, had perhaps the most creative counterpoint to the imposition of the Travel Promotion Act fee. “It seems a bit absurd that the United States, of all countries, should tax people who are not represented in the debate. Taxation without representation has, I believe, played a certain role in American history,” he said, “so I believe they should look at this again.”