The post-9/11 world

10th September 2004, Comments 0 comments

America and the rest of other world this week mark the third anniversary of one of the most defining moments in recent history: the horrific 11 September attacks on the New York and Washington. But as Christiane Oelrich reports, the post-9/11 clampdown has cost companies billions and added to problems travelling around the world.

While air transport and the tourism industry suffered the hardest financial hits from the 2001 terrorist attacks on New York and Washington, almost every other industry has seen operating costs soar.

Three years later: adding up the costs

Exploding insurance premiums and outlays for security measures, for example, are two of the largest offenders.

But business owners are now sounding the alarm over yet another hurdle that is costing billions. Harsher US visa requirements have already eaten up USD 30 billion (EUR 25 billion) for US exporters. And foreign businesses and travellers are also feeling the effects.

A German entrepreneur who employs 30 workers and has invested more than USD 2 million in his Washington-based operations, for example, landed at a Washington airport recently only to be deported immediately back to Germany. He had not applied within the proper deadline to extend his work permit.

Border officials showed no mercy.

"Absolute travesty," said Peter Esser, the general counsel in the office of the Representative of German Industry and Trade. In the past, Esser said, border officials would have just waved such a person through.

*quote1*The business owner was outraged. He had to cool his heels three weeks in Germany before Americans approved his return. Valuable weeks were lost in his work plan.

The problem is even bigger for US enterprises who struggle to bring interested buyers into the country.

Several dozen Chinese managers for example had their visa applications turned down to attend the world's second-largest industrial fair this month in Chicago - the International Manufacturing and Technology Show - according to Paul Freedenberg, an executive with the Association for Manufacturing and Technology (AMT).

"China is a major market. We can't afford to have the Chinese unable to come to our shows," he warned.

Since 1998, for example, US consumption of machine tools has dropped by 67 percent, meaning US manufacturers of such items must sell to foreign markets. In 2002, China passed the US in purchase of machine tools, and by 2004, their purchases had doubled that in the US.

Post 9/11 restrictions have added to travellers' frustrations

Total losses to US exporters over two years due to the visa problems alone are estimated at USD 30 billion, according to a study commissioned by eight US international business groups, including AMT and the US-Russia Business Council.

About USD 25 billion went begging through lost contracts, and another USD 5 billion went to other needs. For example, employee training courses have to be organised abroad so that non-American employees working at foreign branches can participate, incurring added costs.

Preiser Scientific, which manufactures precision instruments, lost a contract for several hundred thousand dollars to a German competitor because the manager of a Chinese coal-fired electricity plant who wanted to buy US-made instruments could not get a visa.

The aircraft giant Boeing had multiple airplanes standing for months in the hangar because foreign customers could not obtain visas for their pilots.

An 8,000 person delegation from Amway Korea had to cancel a conference in the US due to visa problems, costing a loss of USD 15 million to the conference city.

*quote2*Bill Reinsch, president of the Foreign Trade Council, said the USD 30 billion was a "conservative estimate".

"Companies don't want to publicly announce (their problems) because they don't want to tip off the competitors," he said.

"Of course, the visa hurdles for those who operate businesses here are bound up with huge investments of time and annoyance," said Robert Bergmann, who represents Germany's Chamber of  Trade and Industry. The German economic ministry has broached the subject with US officials.

AMT's Freedenberg says now is not a good time to address a remedy to the situation, in the midst of the presidential election campaign.

"The emphasis is on tightening the borders and they haven't figured out how to balance that with keeping them open for legitimate visitors," he said.

The trade organisations are demanding a quicker processing of visas and priority handling for foreign trade partners.
September 2004


[Copyright Expatica 2004]

Subject: German news, 11 September attacks

0 Comments To This Article