Security shuts out a world of wealth
State business officials are up in arms over entry rules they say are costing Florida billions in foreign trade.
By JAMES THORNER
Published February 26, 2007
Alan Becker, a board member of Enterprise Florida, says "We have a pure moronic policy creating an illusion of security but detrimental to our markets."
The delegation of 11 Chinese pharmaceutical executives had all but locked up December trips to Tampa in hope of cutting deals with the likes of H. Lee Moffitt Cancer Center.
Then the United States consulate in China began culling the visa applicants. Five executives snagged the golden ticket. The other six couldn't pass go.
"These were all presidents and vice presidents of companies, and since only half the delegates got the visa, they canceled the trip," said Hongling Han-Ralston, an international lawyer in Tampa.
For people whose job description is to make Florida an international business gateway, such unpredictability from immigration officials is akin to lifting the drawbridge.
More than five years after the attacks on the Pentagon and World Trade Center, Florida's top business leaders want Washington to weigh border security against the cost to the Sunshine State in trade, investment and goodwill. They say billions of dollars may have bypassed Florida as Homeland Security rules tangle hundreds of thousands of visa applications in red tape or force Florida bankers to snoop on overseas depositors.
Calls for reform are in the air, most recently at a conference in Largo sponsored by the Center for Competitive Florida. The goal: Keep out terrorists but lighten up on business people here to make a buck.
"We have a pure moronic policy creating an illusion of security but detrimental to our markets," said Fort Lauderdale lawyer Alan Becker, a board member of Enterprise Florida, the state's top business recruitment agency.
Stories are accumulating about the impact on Florida business:
- From 2000 to 2005, employment in international banking plunged 35 percent in Florida, representing 5,700 jobs and $2.1-billion in lost revenue, according to Florida economist Tony Villamil, a former U.S. undersecretary of commerce. European banks have captured many Latin American and Caribbean customers who used to deposit assets in Florida but worry about sharing private information for security's sake.
- Airlines used to favor Miami as a transit hub, a place to catch connecting flights between Europe and Latin America. But when the United States demanded visas merely to change planes, airlines shifted business to the Bahamas and elsewhere. Iberia, the Spanish national airline, abandoned its Miami hub, citing meddlesome security.
- Florida's trying to make itself a premier biomedical hub, but Swiss drugmaker Novartis cited immigration and airport security among its top reasons for holding back investment in the Sunshine State. Nationally, visa policy alone has cost the United States more than $30-billion in business a year, Enterprise Florida said.
- In a miscue over protocol, at least 10 ministers and heads of state have been pulled aside and searched at Florida airports. The detention two years ago of Crown Prince Felipe of Spain created a hubbub in Miami. Spanish airport security retaliated by pulling aside Floridians in Europe on business.
Floridians fear overzealous enforcement of border security could cost the state a huge prize: the Permanent Secretariat of the Free Trade Area of the Americas. The plan is to erect a free-trade zone of 34 free economies and 800-million consumers from Alaska to Argentina. Trinidad and Panama City are also competing to become the "Brussels of the Americas."
If the secretariat chooses Miami, Enterprise Florida predicts up to 89,259 direct and indirect jobs, $13.6-billion added to Florida's gross state product and $156.7-million in yearly taxes.
"Florida is the center of the Western Hemisphere, but these rules are like termites eating at our foundation," said Dom Calabro, president of Florida Tax Watch and an Enterprise Florida board member.
Before the terrorist attacks of Sept. 11, 2001, getting a visa meant presenting a letter of invitation and waiting a couple of weeks. Now every applicant must be interviewed in person, and the wait can last months.
Economist Maria Crummett, dean of international affairs at the University of South Florida, recalls a Chinese doctoral student barred from the United States when the visa interviewer deemed his thesis a security risk. He was researching mold-sensing wallpaper.
"These represent the best and the brightest in whole fields like engineering," Crummett said. "To me, it's also a national security issue. We can't seem to grow our own Ph.D.s domestically."
The rules aren't impossible to negotiate. IMG Academies, the sports training business in Bradenton, has managed to grease the wheel at U.S. embassies abroad, though getting visitors from Russia and China through remains problematic.
IMG trained tennis stars such as Andre Agassi and Pete Sampras. About 8,000 of its 12,000 clients last year were foreign. "We were really afraid when it first started to happen, but it hasn't been as bad as we thought," said sales director Steve Shulla.
State officials propose a reform-minded alliance of larger states that rely on foreign commerce. The states would lobby Washington as a group. California, New York and Texas are obvious partners. The first step is liberalization of visa policies that are more kick in the rear than pat on the back.
"Some bureaucrats are so paranoid that something (bad) will happen on their watch that they'd rather nothing happen at all," said Becker of Enterprise Florida.
"In Florida, we have it worse since we're dependent on international trade and travel," he said. "When it comes to business, our own government has done more to harm us than our enemies have been able to do."
Losses in Florida, by the numbers
Good intentions aside, Homeland Security rules are taking their toll on business. Global gateways like Florida feel it more. For example:
- Lost international banking jobs in Florida: 5,700
- Lost revenue linked to lost banking jobs: $2.1-billion
- Decline in foreign student enrollment at Florida public universities this year: 1,384
- Cost in Florida of increased port security from 2001 to 2005: $124-million
- Number of real estate transactions by foreigners in Florida last year: 81,900
- Number of Floridians employed by foreign-owned firms: 204,000
Rules changes affecting businesses
- Visa applicants must submit to in-person interviews at U.S. embassies and consulates and pay a nonrefundable $300 fee with no guarantee of getting a visa after waits of up to six months. Before 9/11, interviews were random and relatively rare. Consulate staffing hasn't increased commensurate with the case loads.
- "Know your client" rules force banks to collect sensitive financial data from foreign depositors. The information, which includes the sources of the money coming ashore, can be distributed to U.S. and foreign intelligence services. Financial institutions have to file "suspicious activities reports" when applicable.
- Port security regulations threaten to impose three layers of sometimes-conflicting rules - local, state and federal - on port workers and visitors. Ports in competing states like Alabama aren't so encumbered.
[Last modified February 26, 2007, 01:17:48]
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