World's `Worst' Visa System Scares Business Away From the U.S.

By Jeff Bliss and John Hughes
Bloomberg
Dec. 28, 2006

For growing numbers of international business travelers, visa and customs regulations are making trips to the U.S. a thing of the past.

Companies say U.S. rules have become so onerous in the wake of the Sept. 11 terrorist attacks that it's often simpler to meet customers, business partners and employees elsewhere. Exxon Mobil Corp. has resorted to customer meetings in a London branch office; Ingersoll-Rand Co. says it took one of its Indian engineers three 18-hour trips to get his U.S. visa.

Problems created by the entry requirements have become so evident that the man who initially helped enforce them -- Tom Ridge, the first U.S. secretary of Homeland Security -- is now working with a business group to change them.

``Our challenge now is to continue to meet our security needs while striking a better balance with how we welcome foreign visitors,'' Ridge says.

The number of business travelers to the U.S. fell 10 percent in 2005 from the previous year, according to World Travel Market, a London-based trade-show group. The Discover America Partnership -- the group Ridge is working with, an organization of business executives working to improve America's image abroad -- says its survey of foreign travelers found that the U.S. entry process was rated the ``worst'' by a margin of more than two to one.

`Disastrous Implications'

Roger Dow, president and chief executive officer of the Washington-based Travel Industry Association, says the situation ``is going to have disastrous implications'' for the U.S. economy unless changes are made. The National Foreign Trade Council says the entry rules cost U.S. businesses $31 billion in lost sales and higher expenses between 2002 and 2004.

More broadly, U.S. business groups say, foreign travelers choosing other destinations might fuel the growth of rival commercial and financial centers at the expense of the U.S. Europe is a major beneficiary: Foreign business travel rose 8 percent from 2004 to 2005, according to World Travel Market.

International travel ``has expanded in Dubai, Budapest, Dubrovnik, not Washington, Philadelphia and Boston,'' says William Hanbury, president and CEO of the Washington Convention and Tourism Corp.

Starting Jan. 23, entry requirements will further tighten when everyone entering the U.S. by airplane from Canada, Mexico, South and Central America and the Caribbean will be required to present a passport.

Companies' Complaints

Companies are pressing their case with the U.S. State Department. Visa regulations were a topic at a meeting Dec. 6 between Under Secretary for Management Henrietta Fore, Assistant Secretary for Consular Affairs Maura Harty and executives from companies including Boeing Co., Walt Disney Co. and Marriott International Inc.

With no major changes in sight, executives at Irving, Texas- based Exxon Mobil are meeting with a ``significant'' number of foreign customers, business partners and employees in Europe and Singapore, says Dan Nelson, who heads the company's legislative strategy team in Washington.

The arrangement puts Exxon Mobil at a disadvantage because the DVD presentation they offer in places like London ``doesn't let us set up a compelling case'' to close a deal, Nelson says.

Pixelworks Inc., with no time to appeal visa denials for some 20 employees in China, sent the workers to a Canadian branch office for training, says Chris Bright, a spokesman for the Tualatin, Oregon-based semiconductor maker.

Trips to Chennai

At Hamilton, Bermuda-based Ingersoll-Rand, travel troubleshooter Elizabeth Dickson tells the story of the Indian engineer who had to make three trips to the U.S. consulate in Chennai, an 18-hour trek, because of U.S. government mistakes. Those included first issuing him the wrong type of visa and then refusing to give him the correct visa, she says.

Since learning that all of the Sept. 11 hijackers entered the country on visas, the U.S. has required every applicant to be interviewed in person and fingerprinted. Previously, many foreigners could get visas by applying through the mail.

The new rules, as well as stepped-up searches and interrogations by customs officials, have saddled the U.S. with a reputation for being a tough country to visit.

Windowless Rooms

Bill Reinsch, the trade council's president, says foreign executives have told him stories of being detained by customs officers for hours in windowless rooms, only to be let go without explanation.

``I guarantee you that everyone involved in those incidents goes back and talks about it,'' he says.

Even if U.S. officials can justify their initiatives with the need for heightened security, they're ignoring the negative image such programs create, business-travel groups say.

``We do have a perception out there that it's a difficult country to enter, this whole `fortress America' idea,'' says Kevin Mitchell, chairman of the Business Travel Coalition, a group of frequent foreign and U.S. business travelers based in Radnor, Pennsylvania.

While the U.S. government has used a special computer system to pinpoint suspicious travelers since the mid-1990s, recent news stories about the practice have raised concerns with the American Civil Liberties Union and business traveler groups.

The computer system ``just reinforces the notion that we're a bit out of control,'' Mitchell says.

Confiscating Laptops

Customs officials on rare occasions take travelers' laptop computers and search the files, a right the government says it has under U.S. law. The seizures have spawned court cases and prompted the Association of Corporate Travel Executives, an Alexandria, Virginia-based group representing companies and travel agents, to send out an advisory on the procedure.

Problems with visas and customs are the exception and aren't the primary cause of any downturn in business travel to the U.S., Bush administration officials say.

Since the Sept. 11 attacks, the State Department has added 520 staffers to process visas and has worked to automate procedures and lower the waiting time for interviews, which used to be as long as five months in India, Deputy Assistant Secretary of State for Visa Services Tony Edson says.

Still, he says, ``if people don't think the U.S. is welcoming international travelers, it's as important as what America is actually doing with world travelers.''

Denying Entry

On average, Customs and Border Protection officers handle 1.1 million people coming into the U.S. every day, denying entry to only 860, or less than 1 percent, says Kelly Klundt, an agency spokeswoman.

Aware of the public's negative perception, Customs and Border Protection has begun a training program to make officers more sensitive to the foreigners they're questioning.

``We understand and are acutely aware that the vast majority of travelers are legitimate,'' Klundt says.

Reinsch says progress on making the U.S. a more welcoming place is inconsistent. ``For every improvement, there seems to be something bad that happens at the same time,'' he says.