The State Department recently responded to a visa inquiry from Congress by saying the visa problem had been solved. We would all rejoice if that statement were true, but unfortunately it is not.
In fact, major institutions as well as individuals are making decisions based on the assumption that visa problems are likely to continue for a long time.
The Los Angeles Times reported in October that U.S. and foreign hospitals are building medical centers in cities such as Singapore and Shanghai for wealthy patients who can no longer travel to the U.S. in a timely manner to obtain treatment for life-threatening diseases.
A four to six-month delay is not a reasonable timeframe for obtaining a visa when your heart or your kidneys are failing. Similarly, wealthy foreigners are shopping, buying vacation homes, and investing in places other than the U.S. That has contributed to a plunge in foreign direct investments — from $72 billion in 2002 to $40 billion in 2003.
It's difficult to estimate how visa delays and other visa problems have contributed to companies sending meetings and even production offshore. Nevertheless, the National Foreign Trade Council, with members such as Boeing, Caterpillar, and Motorola, estimates a $30.7 billion cost in lost contracts and delayed shipments as a result of visa problems. Its report notes that visa problems impede access to fast-growing markets such as China, which supports the U.S. Government in the war on terror and has not been a source of any terrorists.
As I have noted in earlier columns, a broad-based coalition of U.S. industry has been meeting with the relevant government agencies to fix the visa process. But, thus far, those agencies have been reluctant to admit there is a problem. In addition to the recent State Department declaration of victory, Asa Hutchison, Under Secretary for Transportation and Border Security in the Department of Homeland Security, argues, "I would make the case it is not hurting our economy; it's the foundation for economic growth." This atmosphere of denial doesn't address the problems created by the post-9/11 visa program. The new program, which was intended to keep terrorists out of the U.S., has lost its focus. The State Department, in particular, is using the program to attack an additional threat: industrial espionage.
The criteria for denying visa applications on the grounds of industrial espionage added complexity and confusion to the review process. Indeed, it was the principal reason for lengthening that process from the original two weeks (in China) to the four to six months it now takes.
Today, almost all visa applications from China are shipped back to the U.S. for security reviews. This means many months can go by from the time an applicant decides to go to the U.S. to when his visa is approved. Meanwhile, machine tools sit in factories waiting for run-offs, trade show invitations to Chinese customers become empty gestures, and all sorts of business that requires a trip to the U.S. remains undone for lack of visas.
I would not blame this fiasco on Secretary Colin Powell. He has had his plate full in recent years. But I would expect his successor to make solving the visa problem an urgent priority during the next year. The American business community, particularly its depressed manufacturing sector, should not pay the price for government bureaucrats who don't know how to set priorities or administer in a timely manner what should be a straightforward program.
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