[Senate Hearing 109-221]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-221
 
   SAFETY AND CONVENIENCE IN CROSS-BORDER TRAVEL: AN ANALYSIS OF THE 
                  WESTERN HEMISPHERE TRAVEL INITIATIVE

=======================================================================

                                HEARING

                               BEFORE THE

                  SUBCOMMITTEE ON WESTERN HEMISPHERE,
                   PEACE CORPS AND NARCOTICS AFFAIRS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 9, 2005

                               __________

       Printed for the use of the Committee on Foreign Relations


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                     COMMITTEE ON FOREIGN RELATIONS

                  RICHARD G. LUGAR, Indiana, Chairman

CHUCK HAGEL, Nebraska                JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island         PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia               CHRISTOPHER J. DODD, Connecticut
NORM COLEMAN, Minnesota              JOHN F. KERRY, Massachusetts
GEORGE V. VOINOVICH, Ohio            RUSSELL D. FEINGOLD, Wisconsin
LAMAR ALEXANDER, Tennessee           BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire        BILL NELSON, Florida
LISA MURKOWSKI, Alaska               BARACK OBAMA, Illinois
MEL MARTINEZ, Florida
                 Kenneth A. Myers, Jr., Staff Director
              Antony J. Blinken, Democratic Staff Director

                                 ------                                

               SUBCOMMITTEE ON WESTERN HEMISPHERE, PEACE
                      CORPS AND NARCOTICS AFFAIRS

                   NORM COLEMAN, Minnesota, Chairman

LINCOLN CHAFEE, Rhode Island         CHRISTOPHER J. DODD, Connecticut
GEORGE ALLEN, Virginia               JOHN F. KERRY, Massachusetts
MEL MARTINEZ, Florida                BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire        BILL NELSON, Florida

                                  (ii)




                            C O N T E N T S

                              ----------                              
                                                                   Page

Coleman, Hon. Norm, U.S. Senator from Minnesota, opening 
  statement......................................................     1
    Letter from Chamber of Commerce of the United States of 
      America....................................................    27
    Prepared statement by Tammy L. Lee, vice president, 
      corporation affairs, the Mark Travel Corporation...........    28
    Letter from Travel Industry Association of America...........    31
Dezenski, Hon. Elaine, Acting Assistant Secretary for Policy and 
  Planning, Border and Transportation Security Directorate, 
  Department of Homeland Security, Washington, DC................     4
    Prepared statement...........................................     6
Dodd, Hon. Christopher J., U.S. Senator from Connecticut.........    17
Moss, Frank, Deputy Assistant Secretary for Passport Services, 
  Bureau of Consular Affairs, Department of State, Washington, DC     7
    Prepared statement...........................................     9
Pastor, Dr. Robert A., vice president of international affairs, 
  professor, and director of the Center for North American 
  Studies, American University, Washington, DC...................    40
    Prepared statement...........................................    43
Ruden, Paul M., senior vice president of legal and industry 
  affairs, American Society of Travel Agencies, Inc., Alexandria, 
  VA.............................................................    32
    Prepared statement...........................................    34

                                 (iii)

  


                    SAFETY AND CONVENIENCE IN CROSS-
 BORDER TRAVEL: AN ANALYSIS OF THE WESTERN HEMISPHERE TRAVEL INITIATIVE

                              ----------                              


                         THURSDAY, JUNE 9, 2005

                           U.S. Senate,    
        Subcommittee on Western Hemisphere,
                 Peace Corps and Narcotics Affairs,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:30 p.m., in 
room SH-216, Hart Senate Office Building, the Hon. Norm 
Coleman, chairman of the committee, presiding.
    Present: Senators Coleman and Dodd.

   OPENING STATEMENT OF HON. NORM COLEMAN, U.S. SENATOR FROM 
                           MINNESOTA

    Senator Coleman. This hearing of the Senate Foreign 
Relations Subcommittee on Western Hemisphere, Peace Corps and 
Narcotics Affairs will come to order.
    If you study the Constitution, you will not find a section 
entitled the ``Law of Unintended Consequences,'' but it might 
as well be there. For every action of the Federal Government, 
there are major reactions we did not intend or perhaps even 
imagine that require us to pay attention to the impact of our 
actions and to address negative ramifications as soon as or 
even before they appear.
    The tragedy of September 11 showed the weakness in United 
States border security. Since then, we have taken a host of 
actions to bolster homeland security. We have aggressively 
moved against terrorists at home and abroad, and have taken 
many necessary steps to stop terrorists from entering our 
country.
    We have strengthened the rules that govern who may enter 
the country. Sometimes, however, the very efforts we undertake 
to make us safer and stronger can have unintended or even 
counterproductive consequences. I have spoken at length about 
the counterproductive effects of the new barriers to students 
seeking to study in the United States.
    At today's hearing, we will consider what I believe could 
be the unintended consequences of another policy; one which 
could make it far more difficult for Americans who travel 
between the United States, Canada, Mexico, and the Caribbean.
    For decades, travel between the United States, Canada, 
Mexico, Central America, and the Caribbean has been covered 
under what is known as the Western Hemisphere exception. It 
seems logical to have different rules to govern travel between 
the United States and our closest neighbors. Americans have 
been able to use drivers' licenses and birth certificates to 
visit and return from these destinations. In turn, we have 
worked with these countries to modernize the borders between us 
and to strengthen North America's external border. I would 
note, parenthetically, having just come back from Europe last 
week, in Europe they are actually coming together and trying to 
make it easier to travel between countries.
    However, legislation passed last year, and the proposed 
implementation of that legislation, threatens to fundamentally 
change the way Americans travel in this part of the world.
    Section 7209 of last year's National Intelligence Reform 
Act stipulated that the Departments of Homeland Security and 
State, and I quote, ``shall develop and implement a plan as 
expeditiously as possible, to require a passport or other 
document or combination of documents deemed by the Secretary of 
Homeland Security to be sufficient to denote identity and 
citizenship for all travel into the United States by United 
States citizens and by categories of individuals for whom 
documentation requirements have previously been waived.'' The 
legislation goes on, ``This plan shall be implemented not later 
than January 1, 2008, and shall seek to expedite the travel of 
frequent travelers, including those who reside in border 
communities; and in doing so, shall make readily available a 
registered traveler program.''
    To implement these measures, on April 5 the State 
Department and Department of Homeland Security unveiled the 
Western Hemisphere Travel Initiative, which over time will 
increase the document requirement for Americans traveling in 
this part of the world.
    By the end of this year, a passport or other accepted 
document will be required for all air and sea travel to and 
from the Caribbean, Bermuda, Central and South America.
    On December 31, 2006, the new document requirement will 
apply for all air and sea travel to and from Canada and Mexico 
as well.
    And starting January 1, 2008, a passport or other accepted 
document will be required for all air, sea, and land border 
crossings.
    While I support the general intent of this legislation, I 
am concerned about its impact on average Americans. One of the 
challenges of Washington policymakers is to ensure that our 
laws make sense to average Americans outside the Beltway.
    Minnesota is a border State; 2.2 million people travel 
through the International Falls border-crossing site every 
year. People in my State cross the border to fish or hunt, 
shop, trade or just evaluate the hockey talent in our neighbor 
to the north. Particularly since the NHL strike is, I think, 
coming to an end, this is a very, very important effort.
    Crossing the border is part of their routines. Many 
frequent travelers in my State do not have passports because 
they have never needed them. They need to be able to cross with 
the IDs they carry in their wallets. Passports are difficult 
and costly to obtain, especially for people who live outside of 
a major city.
    This policy also has the potential to seriously hurt the 
travel industry. Cruises in the Caribbean and Mexico appeal to 
American tourists in part because of the ease in getting to 
these locations without a passport.
    Millions of Americans visit Mexico, Canada, and the 
Caribbean each year because of the ease and affordability of 
these destinations. The new regulations will change this and 
could have a devastating impact on the U.S. travel industry 
just as it is beginning to recover from the post-9/11 slump.
    There is little question that these new requirements will 
hamper legitimate interstate travel between the United States 
and our neighbors. While alternative documents such as SENTRI, 
NEXUS, FAST and border-crossing cards may also be used in lieu 
of a passport, these documents also cost money and are often 
inconvenient or perhaps inappropriate for average Americans.
    I am also concerned about the pace of this initiative. The 
first requirement is supposed to take effect before the end of 
this year. Yet, the departments still have not issued their 
much-anticipated Advanced Notice of Proposed Rulemaking to lay 
out the details on how the program is to be implemented. This 
needs to happen sooner rather than later, so travelers have 
time to prepare.
    As this process moves forward, I hope the administration 
will take the concerns of this subcommittee into account, as 
well as, I might add, the concerns of President Bush himself.
    I also hope that those who are watching and participating 
in this hearing will make their views known directly during the 
rulemaking process once it begins.
    Like so many other policy issues, it comes down to a 
question of balance. Today our country is challenged to strike 
the right balance between a need to increase security along our 
borders while simultaneously upholding our tradition of 
openness to travelers, students, and trade.
    While September 11 illustrated the need for improvements on 
the security front, a fortress America mentality will not keep 
our country secure and prosperous in this era of globalization. 
We need to be vigilant of terrorists. But we cannot give them 
the victory of making us twist ourselves into a pretzel in the 
name of security.
    Our goal today is to seek the proper balance between 
security and conducting normal business and travel.
    To address this question of balance, this committee will 
hear from four witnesses. Our first panelists will discuss 
plans by the State Department and the Department of Homeland 
Security to implement the Western Hemisphere Travel 
Initiatives.
    Members of our second panel will shed light on how this 
policy is going to affect real people, how it fits into the 
real goal of enhanced security for all Americans.
    We will begin with Ms. Elaine Dezenski, Acting Assistant 
Secretary for Policy and Planning at the Department of Homeland 
Security's Border and Transportation Security Directorate. In 
this position, she is responsible for ensuring that the 
policies enacted by BTS meet their objective of enhancing 
homeland security.
    Prior to this position, Ms. Dezenski has served as the 
Deputy Assistant Secretary for Policy and Planning in the BTS 
Directorate, as Director of Cargo and Trade Policy at BTS; and 
as Director of Maritime, Land and Cargo Policy at the 
Transportation Security Administration.
    Before joining the DHS, Ms. Dezenski was a Special 
Assistant to the Administrator of the Federal Transit 
Administration. She has also served in the office of 
Congressman Sherwood Boehlert, and began her professional 
career with the transportation division of Siemens Corporation.
    Next we will hear from Mr. Frank Moss, Deputy Assistant 
Secretary for Passport Services at the State Department's 
Bureau of Consular Affairs. In this position, he is responsible 
for overall management of the Department's efforts to 
adjudicate and produce passports for more than 7 million 
American citizen customers each year.
    Prior to this assignment, Mr. Moss served as the Executive 
Director of the Bureau of Consular Affairs, and as Senior 
Advisor for Border Security to the Assistant Secretary of State 
for Consular Affairs.
    He has also worked in the office of the coordinator for 
counterterrorism, as refugee coordinator at the U.S. Embassy in 
Khartoum, Sudan, and for the U.N. High Commissioner for 
Refugees in Pakistan.
    Ms. Dezenski, we will begin with you. Please summarize your 
remarks. Your full testimony will be included in the hearing 
record.

 STATEMENT OF HON. ELAINE DEZENSKI, ACTING ASSISTANT SECRETARY 
  FOR POLICY AND PLANNING, BORDER AND TRANSPORTATION SECURITY 
  DIRECTORATE, DEPARTMENT OF HOMELAND SECURITY, WASHINGTON, DC

    Ms. Dezenski. Thank you very much, Chairman Coleman. We 
appreciate the opportunity to be here today to talk to you 
about a very important issue and a very timely issue. I would 
like to request that my written statement be submitted for the 
record.
    Senator Coleman. Without objection.
    Ms. Dezenski. Thank you. As you mentioned, the Intelligence 
Reform Act of 2004 mandated that DHS and the State Department 
develop and implement a plan to require U.S. citizens and 
foreign nationals to present a passport or other authorized 
travel documents that denote both identity and citizenship when 
entering the United States.
    Our ability to detect fraudulent documents is absolutely 
critical to the success of a broader border management strategy 
system that combines technology, human resources, and policy to 
address the terrorist threat, and to expedite the travel of 
legitimate citizens and visitors.
    Last fiscal year, our border inspectors intercepted over 
78,000 fraudulent documents, so this problem is very real. The 
Intelligence Reform Legislation specifies a deadline of January 
1, 2008, to implement the new document requirements. As my 
colleague, Frank Moss, will tell you, we are working very 
closely with the State Department to meet this ultimate 
deadline and to achieve the security gains without 
unnecessarily disrupting the flow of people at the border.
    Our biggest challenge is at the land border, where we 
handle over a million crossings a day. We know that in 
communities like International Falls, border crossings are 
often routine activities such as going to church and visiting 
family. They are part of everyday life, not just occasional 
trips to foreign countries.
    That is why we are communicating so regularly and directly 
with many of the stakeholder groups and prospective travelers 
inside and outside of our borders; people who have the most 
concerns about how these changes will affect them, their 
businesses, and their communities. Throughout the process, we 
will continue to do everything we can to keep them fully 
informed and to take those needs into account.
    Let me emphasize a few key points before I turn it over to 
my colleague from the State Department. First, our goal is to 
ensure travelers entering the United States have quality secure 
documents. Secure documentation is required to positively 
determine the identity and the citizenship of travelers; and 
this is a prerequisite to ascertaining whether or not they pose 
a risk.
    When we meet that standard for all those who are crossing 
into our country we will be able to better combat terrorism, 
identity theft, document fraud, and illegal immigration. 
Ultimately, this will make it easier, not harder, for good, 
law-abiding people to enter the United States, especially when 
we take advantage of all the benefits of new technologies, such 
as biometrics.
    Since January 2004, for example, we have used biometric 
technology in our US-VISIT program, which is our entry/exit 
process. Biometrics have made it almost impossible for those 
who intend to do us harm or to break our laws to enter through 
our ports of entry under a false identity.
    They are enabling us to catch criminals and immigration 
violators, and they are depriving would-be terrorists of one of 
their most powerful tools, fraudulent travel documents.
    Second, we want to avoid a last-minute rush for travelers 
to comply with this--the new provisions, and we want to avoid 
unnecessary confusion at the time of implementation. So, as we 
implement these new requirements, we need to do so in a way 
that gives the populations most affected sufficient time to 
obtain the documents that they will need.
    We are developing a series of implementation milestones, 
building up to the January 1, 2008, deadline. I must emphasize 
that the Advance Notice of Proposed Rulemaking, which includes 
this proposed implementation schedule is still under review and 
has not been placed in the Federal Register.
    Once it is published, we will allow ample time for public 
comment, and the requirement will not be final until we hear 
fully from the public and explore every option for taking their 
concerns into account.
    Last, I would like to emphasize that while DHS and State 
have identified the passport as the principal document of 
choice, we are also exploring the use of other secure documents 
or combinations of documents that can prove identification of 
that traveler and their citizenship, particularly at the land 
borders, again where we have significant numbers of crossings 
and challenges in terms of that facilitation.
    The ultimate plan will include registered traveler programs 
that expedite the travel of previously screened individuals, 
particularly those who reside in border communities.
    We have a couple of programs in place like NEXUS, SENTRI, 
and FAST, but I think it is fair to say that these programs 
were not originally designed as an alternative to the passport, 
so as we move forward, we really need to think about the 
registered traveler concept as part of the broader border 
management strategy. And what we envision in that regard is, 
based on a global enrollment system and a uniform set of 
requirements for an RT-type card that could, in fact, fit in 
your wallet and may be biometrically enabled, and could work at 
multiple types of border crossings, not just at the land 
border, but also in other modes.
    And we are looking at the expansion of this concept and 
taking our existing programs to move into this, what we 
consider to be, sort of, a new vision for the RT program.
    So we will be continuing to work through that process as we 
finalize the regulatory requirements. We will be looking at the 
broader management strategy for the border to make sure that we 
have accommodated as appropriate.
    This concludes my oral remarks. And thank you once again 
for the opportunity to testify.
    [The prepared statement of Ms. Dezenski follows:]

 Prepared Statement of Elaine Dezenski, Acting Assistant Secretary for 
Policy and Planning, Border and Transportation Directorate, Department 
                  of Homeland Security, Washington, DC

    Chairman Coleman and Ranking Member Dodd and other distinguished 
members, it is a pleasure to appear before you today to discuss the 
approach that the Department of Homeland Security (DHS) is taking to 
address the travel document provisions of the Intelligence Reform and 
Terrorism Prevention Act of 2004.
    The Intelligence Reform and Terrorism Prevention Act of 2004 
(IRTPA) mandates that, by January 1, 2008, the Secretaries of Homeland 
Security and State develop and implement a plan to require all U.S. 
citizens and foreign nationals, who currently do not require a passport 
to enter the United States, to present a passport or other appropriate 
secure identity and citizenship documentation when entering the United 
States regardless of the origin of the travel. Under current 
regulations, U.S. citizens who travel solely within the Western 
Hemisphere do not require passports to return to the United States. A 
similar ``exemption'' applies to most Canadian and Bermudan citizens 
entering the United States. In addition, Mexican citizens traveling 
directly from Mexico or Canada may present the United States-issued 
``B-1/B-2 Visa and Border Crossing Card'' without a passport.
    The Western Hemisphere Travel Document Initiative (WHTI) is the 
joint response from the Departments of Homeland Security (DHS) and 
State (DOS) to existing security concerns as well as the documentary 
requirements of IRTPA. Further, the WHTI has been designed to 
strengthen border security and facilitate entry into the United States 
by legitimate travelers. It will also assist the Government in reducing 
the market for stolen documents, as well as thwarting identity theft.
    This initiative will require all United States citizens, Canadians, 
and citizens of Bermuda and Mexico, as well as citizens of Caribbean 
countries currently exempt from the passport requirement pursuant to 
section 212(d)(4)(B) of the Immigration and Nationality Act, to have a 
passport or other authorized secure documentation denoting nationality 
and identity when entering the United States. It will also standardize 
the documents which may be presented at ports of entry to demonstrate 
both identity and citizenship.
    In accordance with IRTPA, DHS, and DOS have identified the passport 
as the principal document of choice right now, particularly in the 
airport and seaport environments. However, we will also explore the use 
of other secure documents, or combination of documents, denoting 
identity and citizenship, particularly for land border use, where we 
face the most pressing implementation challenges. The plan will include 
registered traveler type programs to expedite the travel of previously 
screened travelers, particularly, those that reside in border 
communities. The WHTI, along with the biometric entry-exit system (i.e. 
US-VISIT), registered traveler programs, and coordinated screening 
capabilities, are part of a larger strategic vision for an immigration 
and border management enterprise that ensures the appropriate mix of 
technology, personnel, and systems connectivity to support security and 
facilitation of legitimate travelers.
    While the goal of the WHTI is to strengthen border security and 
facilitate entry of legitimate travelers into the United States, we do 
understand the implications for industry, business, the general public 
or even our neighbors to the north and south. We are committed to 
working with affected stakeholders to mitigate these implications as 
this initiative gets underway.
    Given the enormity of this change in practice, the Department of 
Homeland Security and the Department of State, in consultation with 
other Government agencies, have agreed to adopt a phased implementation 
plan for the WHTI. The specific timeline for the phases has yet to be 
finalized and is under active discussion within the administration. We 
will elicit and consider comments on all aspects of the plan. Both DHS 
and DOS recognize the unique issues that this initiative will raise, 
and we will remain flexible when working with affected communities.
    It is important to keep the context of this initiative in mind when 
balancing facilitation and security concerns. DHS officers inspect 
about 1.1 million people at our borders every day and the security 
layers we add to our inspections processes take into consideration 
appropriate facilitation efforts such as ``trusted traveler'' programs.
    Recognizing that we want to balance security with facilitation, 
there are some additional documents that we may consider as alternative 
documentation of identity and citizenship. This is primarily the case 
at the land border where we think we may have some flexibility to look 
at four different documents.
    The first document is the BCC or the Border Crossing Card, which is 
given to Mexican nationals who are coming across to the United States 
on a regular basis. In order to get a BCC, you must have a passport, 
and, since the BCC is a B-1/
B-2 visa when presented with a passport, the process is nearly 
identical to issuance of a visa. Another card that we think could be 
deemed a suitable alternative document is the SENTRI card. SENTRI, 
which stands for Secure Electronic Network for Travelers Rapid 
Inspection, is also a program that is utilized to facilitate travelers 
at the southern border. In order to obtain a SENTRI card, you need to 
provide some type of proof of citizenship, a BCC, if required, as well 
as other documentation. You also go through a background check and 
other types of checks.
    On the northern border, working with Canada, we have two existing 
programs using cards. The first is the NEXUS card, which is similar to 
the SENTRI card in that it facilitates travelers who have jobs on the 
other side of the border, for example, or people who are routinely 
visiting family. The NEXUS card is also linked to certain documentation 
requirements. For example, you can provide a passport to get a NEXUS 
card; you can also provide a birth certificate and other types of 
documents that provide proof of citizenship.
    The other card that we would be looking at is called the FAST card, 
or Free and Secure Trade card, and this applies to commercial truck 
drivers at both the northern and southern borders. It is commercially 
focused with the goal of facilitating cargo coming across the border, 
while enhancing security associated with the truck driver of that 
particular truckload. With the FAST program, we have specific 
requirements, including background checks, documentation requirements, 
and biometric requirements.
    As we move forward, we fully anticipate that additional ideas will 
be coming forward for registered traveler type programs, and that we 
will continue to look at options as they may become available, whether 
that is harmonizing within the Department to get to some type of global 
registered traveler program that could be applied at either border, or 
looking at specific programs that can be expanded.
    The WHTI is an important step in protecting homeland security, and 
DHS and DOS will use all available resources to implement this travel 
initiative by the deadline set forth in law. Mr. Chairman and members 
of the subcommittee, I want to thank you for the opportunity to present 
this testimony today. I would be pleased to respond to any questions 
that you might have at this time.

    Senator Coleman. Thank you very much, Ms. Dezenski.
    Mr. Moss.

    STATEMENT OF FRANK MOSS, DEPUTY ASSISTANT SECRETARY FOR 
 PASSPORT SERVICES, BUREAU OF CONSULAR AFFAIRS, DEPARTMENT OF 
                     STATE, WASHINGTON, DC

    Mr. Moss. Chairman Coleman, thank you very much for 
providing me this opportunity to describe how the Department of 
State, in close cooperation with the Department of Homeland 
Security, will enhance U.S. border security and, we believe, 
facilitate travel through implementation of the Western 
Hemisphere Travel Initiative, WHTI, to comply with section 7209 
of the Intelligence Reform and Terrorism Prevention Act of 
2004.
    I would ask that my full statement be submitted for the 
record.
    Senator Coleman. Without objection.
    Mr. Moss. In light of Ms. Dezenski's comments, I will focus 
on the implications of the WHTI for the Department of State.
    As you know, and have so eloquently stated, the scope of 
the WHTI is challenging. The State Department estimates that 
some 2 million Americans travel each year to the Caribbean 
without a passport and more than 4 million other Americans do 
the same by air or sea to Canada and Mexico.
    American citizens also make about 100 million land border 
crossings each year. To help assess the land border 
implications of this program, the State Department has 
contracted with outside experts who will survey land border 
crossers in July at 16 ports of entry on the northern and 
southern border to help us develop more accurate data on this 
aspect of the WHTI.
    Given the enormity of this change in practice, the 
Department of Homeland Security and the Department of State, in 
consultation with other government agencies, have agreed to 
propose a phased implementation program for the WHTI.
    The specific timeline for the phases, as Ms. Dezenski has 
said, has yet to be finalized and is under active consideration 
within the administration.
    A phased implementation program will help us accrue the 
security advantages as soon as possible, facilitate travel at 
an earlier stage, and give us the opportunity to inform the 
tens of millions of travelers who will be affected by this 
policy.
    Last, by spreading out over time a projected increase in 
the Department's workload, we will be able to acquire and 
develop the resources needed to meet that aspect of the WHTI, 
which will be met by U.S. passports.
    Obviously, a key objective of the Bureau of Consular 
Affairs is to ensure that passport services are provided in a 
secure, efficient, and courteous manner. In fact, in order to 
make applying for a passport as convenient as possible for 
American citizens, we have more than 7,000 sites at post 
offices, clerks of court, or other government agencies where 
they can apply for a passport. In the case of Minnesota, Mr. 
Chairman, there are more than 140 such facilities.
    Although we are able to meet current demand for U.S. 
passports, we expect to see significant resource shortfalls 
over the next 3 years based on projected passport demand 
increases.
    In 2004, the Department of State's Office of Passport 
Services issued over 8.8 million passports, a workload increase 
of some 22 percent over the prior year total. Workload this 
year is up another 13 percent, putting us on target to issue 
more than 10 million passports to American citizens this year.
    Based on our current analysis of the scope of the WHTI and 
other projected growth in passport demand, we expect that 
applications for passports will total about 12 million in 
fiscal year 2006, about 14 million in the following year, and 
reach a potentially sustainable annual demand of 17 million by 
fiscal year 2008.
    We look forward to working with Congress as we seek the 
resources needed to implement WHTI in a fashion that does not 
inconvenience American travelers.
    We also recognize that there are many circumstances where 
obtaining a U.S. passport is not the optimal solution for 
travel, particularly in communities along the northern and 
southern borders. And the Intelligence Reform Act recognizes 
this by including the option of using another secure document 
or other documents that denotes citizenship and identity when 
entering the United States. My colleague has already discussed 
these alternatives.
    Both State and DHS recognize that a critical part of 
successful implementation is public participation in the 
regulatory process. With this in mind, we will soon solicit 
public comments as a way to refine the implementation of the 
WHTI.
    The departments have prepared an Advance Notice of Proposed 
Rulemaking, ANPRM, and expect that the comments we receive, 
after it is published, from the public, the private sector, 
state and local governments, and foreign governments will have 
a material effect on the rules we develop.
    As we move forward, I must emphasize both Departments' 
commitment to an open, transparent process with the full 
involvement of the American public and affected groups.
    We look forward to receiving public comments with great 
anticipation and are committed to making sure that concerns and 
interests are explored thoroughly.
    The ANPRM process is an important step in informing the 
public of this important change in travel requirements that we 
will support with a sustained, extensive public outreach 
effort. In addition to explaining the new requirements to the 
American public, the Department of State will also work with 
our hemispheric neighbors to make sure that they are aware of 
the requirements of the WHTI and that they have adequate notice 
to take the necessary steps to comply with them without 
hindering the legitimate flow of people and goods between our 
nations.
    At this time, I am happy to answer my--any questions.
    Senator Coleman. Thank you.
    Mr. Moss. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Moss follows:]

  Prepared Statement of Frank E. Moss, Deputy Assistant Secretary for 
  Passport Services, Bureau of Consular Affairs, Department of State, 
                             Washington, DC

    Chairman Coleman, Ranking Member Dodd, distinguished members of the 
subcommittee, I am pleased to have this opportunity to describe how the 
Department of State, in close cooperation with the Department of 
Homeland Security, plans to augment U.S. border security and facilitate 
international travel by establishing new documentary standards pursuant 
to the Intelligence Reform and Terrorism Prevention Act that U.S. 
citizens and certain foreign nationals must comply with to enter the 
United States from nations in the Western Hemisphere. I will refer to 
this program as the Western Hemisphere Travel Initiative (WHTI).
    In the aftermath of September 11, the Department of State's Bureau 
of Consular Affairs conducted a comprehensive review of our procedures 
for adjudicating the travel documents that we have the legislative 
authority to issue: U.S. passports and immigrant and nonimmigrant 
visas. The U.S. passport is arguably the most valuable travel and 
identity document in the world. As the report of 9/11 Commission noted, 
travel documents are as valuable to terrorists as weapons, and we have 
taken steps to improve both the security features of the passport, as 
well as the underlying adjudicatory process that determines who is 
entitled to one.
    In general, U.S. law requires that American citizens enter the 
United States in possession of a valid passport. There is one major 
exemption--United States citizens can travel to many destinations in 
the Caribbean as well as Mexico, Canada, and Panama without a passport. 
Canadian citizens traveling from within the Western Hemisphere are also 
allowed to enter the United States with only limited documentation such 
as a driver's license. In the spring of 2003, the Department of State 
embarked on interagency consultations to address this potential 
vulnerability.
    Discussions of possible remedies quickly made clear that what will 
augment U.S. border security will also facilitate international travel. 
Currently, to determine whether someone is an American citizen, Customs 
and Border Protection (CBP) officials may be presented with thousands 
of different birth certificates by travelers, not to mention other 
situations where the traveler makes an oral declaration to be an 
American citizen. My colleague, Elaine Dezenski from the Department of 
Homeland Security, will address this issue in more detail in her 
testimony. Suffice it to say that both DHS and State believe that we 
can strengthen border security and facilitate entry processing by 
ensuring that travelers present documents in which border inspectors 
have confidence in both the validity of the document and the validity 
of the decision originally made to issue the document. To simplify and 
secure entry requirements, we believe that a limited number of 
recognized--and secure--identity and citizenship documents is 
preferable.
    Congress clearly endorsed the view that we should enhance border 
security within the Western Hemisphere by requiring passports or other 
secure documents denoting citizenship and identity for travel when it 
enacted section 7209 of the Intelligence Reform and Terrorism 
Prevention Act of 2004 (IRTPA). This legislation, which was signed into 
law on December 17, 2004, requires that the Secretary of Homeland 
Security, in consultation with the Secretary of State, develop and 
implement by January 1, 2008, a plan to require U.S. citizens and non-
U.S. citizens, currently exempt from the passport requirement for 
travel within the Western Hemisphere, to present a passport or other 
authorized documentation that denotes identity and citizenship when 
entering the United States. The law provides for only limited 
circumstances under which the documentary requirement may be waived for 
U.S. citizens or non-U.S. citizens within the Western Hemisphere, such 
as emergent or humanitarian circumstances or in the national interest.
    Importantly, section 7209 also requires that the Secretaries of 
Homeland Security and State seek to facilitate the travel of frequent 
travelers, including those who reside in border communities.
    We enthusiastically welcome legislative support for the Western 
Hemisphere Travel Initiative (WHTI) and appreciate the flexibility in 
determining what document or combination of documents will be adequate 
to establish identity and nationality.
    Given the enormity of this change in practice, the Department of 
Homeland Security and the Department of State, in consultation with 
other Government agencies, have agreed to adopt a phased implementation 
plan for the WHTI. The specific timeline for the phases has yet to be 
finalized and is under active discussion within the administration, 
although the plan must be implemented by January 1, 2008, in accordance 
with the law.
    The scope of this potential program is challenging. The State 
Department estimates that some 2.0 million Americans travel each year 
to the Caribbean without a passport and more than 4.0 million Americans 
do the same by air or sea to Canada and Mexico. And, American citizens 
make about 100 million land border crossings each year, which 
represents total number of trips made, not individuals. To help assess 
the land border implications of this program, the State Department has 
contracted with outside experts who will survey land border crossers in 
July at 16 ports of entry to help us develop more accurate data on the 
scope of this aspect of WHTI.
    Based on the scope of WHTI, it appears that there are a number of 
advantages to phasing in the requirement in an orderly fashion over the 
next 3 years. Our plan is to complete implementation by January 1, 
2008. First, by beginning implementation in advance of that deadline, 
we will begin to accrue the security advantages and build up the 
capacity to administer such a program as soon as possible, as well as 
benefit at an earlier stage from the travel facilitation envisioned by 
the Congress in crafting the legislation. Phased implementation will 
also give us the opportunity to reach out and inform the tens of 
millions of travelers who will be affected by the changes.
    Importantly, by spreading out, over time, a projected increase in 
the Department's workload, we will be able to acquire and develop the 
resources needed to meet the increased demand for U.S. passports and 
other documents satisfying section 7209.
    Naturally, passport demand is a matter of intense interest to the 
Department of State. Will American citizens choose to obtain U.S. 
passports to fulfill the documentary requirement set forth in the 
IRTPA? We expect that many will, especially those who travel by air or 
sea. As I noted, the U.S. passport is undoubtedly the world's premiere 
identity and nationality document. One of the key objectives of the 
Department's Bureau of Consular Affairs is to ensure that passport 
services are provided in a secure, efficient, and courteous manner. In 
order to make applying for a passport as convenient as possible for 
American citizens, we have more than 7,000 sites around the country 
located at post offices, clerks of court, or other Government offices 
where they can apply for a passport.
    We are currently able to meet demand, but based on projected 
passport demand increases over the next 3 years, we expect to face 
significant resource shortfalls as we implement the WHTI. In 2004 the 
Department of State's Office of Passport Services issued over 8.8 
million passports--a workload increase of some 22 percent over the 
prior year total. Workload this year is up another 13 percent, putting 
us on target to issue more than 10 million passports to American 
citizens this year. And, based on our current analysis of the scope of 
WHTI and other projected growth in passport demand, we expect that 
applications for passports will total about 12 million in fiscal year 
2006, about 14 million in fiscal year 2007, and reach a potentially 
sustainable annual demand of 17 million by fiscal year 2008.
    We look forward to working with Congress as we seek the resources 
needed to implement WHTI in a fashion that does not inconvenience 
American travelers.
    We also know that there are many circumstances where obtaining a 
U.S. passport is not the optimal solution for travel--particularly in 
communities along the northern and southern borders--and the IRTPA 
recognizes this by including the option of using another secure 
document or other documents that denotes identity and citizenship when 
entering the United States. My colleague from the Department of 
Homeland Security will discuss these alternatives.
    Both the Department of State and the Department of Homeland 
Security recognize that there are a host of issues that must be 
addressed thoroughly to implement the WHTI smoothly and successfully. A 
critical part of successful implementation is public participation in 
the regulatory process. With this in mind, we will soon solicit public 
comments as a way to refine the implementation of the WHTI. The 
Departments have prepared an Advance Notice of Proposed Rulemaking 
(ANPRM) and expect that the comments we receive after it is published 
will have a material effect on the rules we develop. The Department of 
State is committed to making sure that concerns and interests are 
explored thoroughly and look forward to these comments with great 
anticipation.
    The ANPRM process is an important step in informing the public of 
this important change in travel requirements that we will support with 
a sustained, extensive public outreach effort. In addition to 
explaining the new requirements to the American public, the Department 
of State will also work with our hemispheric neighbors to make sure 
that they are aware of the requirements of the WHTI and that they have 
adequate notice to take the necessary steps to comply with them without 
hindering the legitimate flow of people and goods between our nations.
    At this time, I am happy to answer any questions you might have 
about the Department of State's role in supporting the Department of 
Homeland Security's implementation of the Western Hemisphere Travel 
Initiative.

    Senator Coleman. Thank you very much, Mr. Moss.
    First, let me say that I certainly recognize--this 
committee recognizes--it is a great challenge and a great 
responsibility that is in front of you.
    Just to perhaps clarify a few things. You talk about RT 
cards, which means? RT means?
    Ms. Dezenski. Oh, I am sorry; registered traveler.
    Senator Coleman. That is right. Okay.
    And, Mr. Moss, you talk about 140 sites in Minnesota. Do 
you have a chart that shows that?
    Mr. Moss. Yes; I do.
    Senator Coleman. All right.
    Mr. Moss. Just one moment.
    [Pause.]
    Mr. Moss. In view of simplicity, we do not have them noted 
location by location, but if you actually go to our website, 
you can find the specific location down to the street address.
    [Chart.]

    [Note.--The information contained on the chart presented by 
Mr. Moss can be viewed on the Web site: travel.state.gov.]

    Senator Coleman. My concern, Mr. Moss, even by looking at 
the chart, is that in the areas that are most impacted, which 
is the northern border, are the places where there is the least 
opportunity to get a passport. Let me read, if I can, a 
constituent message that I received.

          Senator Coleman, I just spent $300 to get passports 
        for my family of five so we could be able to travel to 
        Canada and fish a few times each year. It took 4 to 6 
        weeks to get the passports, and I have heard rumors 
        that the price of passports will be going up soon. I 
        followed the trend and tried to beat what I believe to 
        be the rush to comply with what I believe will become a 
        mandate. However, as a parent of three children, ages 
        17, 14, and 10, I question why they need passports to 
        travel back and forth to Canada. I can assure you and 
        others that my children do not match the profile of 
        anything that threatens us, yet my wife and I had to 
        incur this extra cost because of a desire to continue 
        to fish in Canada.

    First, what is the cost of a passport for an adult and a 
child?
    Mr. Moss. Okay. What I would like to do is describe it. It 
falls into two categories, not just adult and children, but a 
first-time applicant versus a renewal.
    For a first-time applicant, the total fee, the fee you pay 
to the acceptance agent, one of these 140-odd entities, plus 
the fee you pay that goes to the U.S. Treasury, and what the 
State Department retains, is a total of $97 for an adult, $82 
for a child, and then a renewal is commensurately $30 less in 
the case of the adult. Each child's renewal under the age of 16 
is essentially a de novo adjudication.
    Senator Coleman. And how many years is a passport good for?
    Mr. Moss. A passport is good for an adult for 10 years. For 
a child it is good for 5.
    Senator Coleman. Can you give your thoughts on lowering the 
costs of passports if, in fact--and I am not there yet by the 
way--but if, in fact, we are going to make passports required? 
Have there been discussions of actually lowering the cost of 
passports?
    Mr. Moss. Well, the first point I would make, Mr. Chairman, 
is that, as I said in my testimony, we do not see the passport 
as being the only answer to this program, especially along the 
land borders. That is why I think the cooperation we have with 
the Department of Homeland Security is so important.
    I can tell you, however, we are looking at the fee, because 
the passport fee or the $97 fee is really composed of three 
elements. One is the cost of the passport book itself, which is 
increasing, because of the inclusion of biometrics. Another 
cost is actually adjudicating the passport, deciding if someone 
is, in fact, a U.S. citizen. And, finally, there is the issue 
of what we call the--in State Department speak--the expected 
cost of American Citizen Services, as people travel abroad.
    Clearly, the number of passport applicants is increasing. 
That spreads that relatively fixed cost of Citizen Services 
over a larger population. And we are certainly looking closely 
at the fee and will be doing so this summer.
    I can make no assurance of what will happen with that. But 
I do want to let you and the committee know that we are looking 
at it very closely.
    Senator Coleman. Among the alternative programs are the 
NEXUS and FAST programs. Ms. Dezenski, talk a little bit about 
those. Again, my concern is for the average person. They are 
going across the border on occasion, maybe to fish, maybe to 
just do a little commerce. Then there is the other side of it, 
too, which I will get to, which is the impact this has upon our 
Canadian neighbors and what kind of enrollments, what kind of 
passport coverage and saturation they have, and the potential 
for economically impacting these communities negatively, 
because they do not have high levels, high concentration of 
passport saturation.
    But first could we step back? Tell me a little bit about 
NEXUS and FAST and how they work, and how they apply to the 
average citizen.
    Ms. Dezenski. Sure. There are actually three programs--the 
NEXUS program, which is utilized at the northern border; the 
SENTRI program, which is--essentially it is the applicable 
program for the southern border; and the FAST program, which is 
used at both northern and southern borders, but is primarily 
utilized for commercial traffic, so truck drivers. So that one 
is an option in terms of a registration-type program, but is 
really focused on the commercial traffic.
    So the northern border, the NEXUS program is a program that 
requires a background check, an in-person meeting with customs 
officials. The submission of certain types of information. You 
go through an enrollment process, and it takes, I believe, 
about 4 or 5 weeks to obtain the card.
    It is primarily focused on those who have frequent 
crossings, business travelers----
    Senator Coleman. For commercial travelers, or----
    Ms. Dezenski [continuing]. Business travelers. Anyone can 
apply for the card and, in fact, you do not have to be a U.S. 
citizen. You can be a foreign national and apply for the NEXUS 
card as well.
    So it is heavily utilized at certain crossings that tend to 
be higher volume crossings. And, again, it was not a program 
that was intended to be a substitute for a passport. It was 
really a facilitation type of a program, which now has security 
applications and is, I think, the precursor to what we are 
going to be looking at for a broader registered traveler-type 
concept that could be used at multiple types of border 
crossings.
    The SENTRI program, of course, is very similar to it, but, 
again, only applicable at the southern border.
    Senator Coleman. And when you say border crossings, is this 
program then available at a limited number of border crossings 
at this stage?
    Ms. Dezenski. There are a limited number of enrollment 
centers, so you would have to go to the nearest enrollment 
center to go through the interview process. And we do not have 
an enrollment center in Minnesota at this time.
    We are looking at where we need to expand based on where 
these requirements will take us.
    Senator Coleman. One of the comments made is the schedule 
for implementation. I think both you and Mr. Moss said at this 
point that is flexible. In my opening statement, I noted that I 
believe that this was the schedule that by the end of this 
year, a passport or other accepted document will be required 
for all air and sea travel to and from the Caribbean, Bermuda, 
Central and South America. And then on December 31, 2006, the 
new document requirement will apply for all air and sea travel 
to and from Mexico and Canada as well. And starting January 
2008, a passport or other accepted document will be required 
for all air, sea, and land border crossings.
    Am I correct that that schedule is not now a firm schedule?
    Ms. Dezenski. Well, it is still under review with OMB and 
within our Departments. We have not actually issued that 
advance notice yet.
    When we announced this initiative about 6 or so weeks ago, 
that was the proposal that we were looking at at the time. So 
we will finalize it and will be able to talk more about it once 
the advance notice goes out. But we are very well aware of the 
concerns that have come up about the potential implementation 
schedule.
    Senator Coleman. I just want to be clear, though, because 
we do not have the notice out. As we sit here today on the 9th 
day of June, is it the Department's intention to require a 
passport for all air and sea travel to and from the Caribbean, 
Bermuda, Central and South America by the end of the year? As 
of today, is that still the intention?
    Mr. Moss. Mr. Chairman, what I would first note is that the 
real impact of this is on travel to and from the Caribbean and 
one country in Central America. The other countries basically 
require a passport to enter and we, therefore, expect the 
traveler to use it on the way back in.
    We are taking, as Elaine said--Ms. Dezenski said, a very 
hard look at this issue of the schedule. There is the 
possibility of perhaps making this into a two-phase program as 
opposed to three phases.
    We also recognize that, obviously, delay in the publication 
of the Advance Notice of Proposed Rulemaking does put into 
question the entire schedule that we had in that April 
announcement. So I would ask that you bear with us for another 
week or so while we finalize this within the executive branch.
    Senator Coleman. But is it then clear that you will take 
into account the delay, that you will have a full period for 
people to respond, that those responses will be carefully and 
thoughtfully evaluated and will factor into any final decision?
    Mr. Moss. Absolutely. And the other point I would make is 
that the public announcement on April 5 has really already 
triggered some of the types of comments that would normally be 
received to an ANPRM process, and that is, of course, already 
affecting the policy deliberations. But we will have a full 
public comment period under the--as we laid out in the original 
announcement.
    Senator Coleman. Thank you.
    Ms. Dezenski, you noted that you have been communicating 
regularly with stakeholders regarding this. What are they 
telling you?
    Ms. Dezenski. It depends on the stakeholder group. I mean, 
we have certainly heard from the American Society of Travel 
Agents, who I know will join us for the next panel. And we have 
heard of concerns regarding the implementation schedule. We 
have also heard from stakeholders that, to a certain extent, 
some surprise that those requirements are not already in place.
    Many people already carry their passports because they 
think it is a requirement. And, in fact, if you travel to the 
Caribbean on a cruise, the cruise lines often require you to 
have a passport. So it may not be a Federal requirement, but 
the cruise lines have implemented that.
    So it depends on which part of the requirements we are 
addressing. And, of course, when we talk to folks who are 
primarily affected at the land border, there are concerns about 
what the alternatives might be for the routine types of 
crossings that we discussed earlier.
    Senator Coleman. Certainly it is an essential part of the 
concern. The commercial piece is also important.
    But getting back to land border crossings, you also in your 
testimony talked about the importance of quality secure 
documents. What do we have in place today? How would you 
evaluate the system today?
    Ms. Dezenski. The system in terms of checking documents?
    Senator Coleman. We have people going back and forth, a 
million a year by land border, by land crossings. I have got 
the figure here. We are talking millions of folks going back 
and forth. Is it your testimony that today we do not have in 
place a system of secure documentation checks?
    Ms. Dezenski. We do--well, I think we are checking 
documents very regularly. I think the problem is that there is 
not always uniformity in type--in terms of the types of 
documents that are utilized.
    For example, there are over 6,000 different types of birth 
certificates, and many different types of driver's license 
formats, so the ability for our border inspector to look at a 
birth certificate, for example, and determine whether that is a 
legitimate document and denotes U.S. citizenship can be very 
challenging, particularly when you want to move people across 
the border very quickly.
    So what we are hoping we get to, is a bit more 
harmonization to not only help the passenger, but help our 
border inspectors make a determination more quickly.
    Senator Coleman. I am trying to get an assessment from you 
of where we stand today, how bad the system is currently. I 
mean, we are talking about a very significant change here. We 
have millions of people crossing every day.
    Thank God, we have been relatively safe. Folks have done a 
good job. But we are talking about the family of five, who is 
living up in International Falls or a little town right next 
door to it, or go further west to Hallock or Warroad. We are 
saying, ``You are going to need to get passports for you and 
your kids.'' And I am trying to assess the level of danger 
today in the system that we have in order for me to get a 
better understanding of how much we have to change it.
    Ms. Dezenski. Right. Well, I think we would agree with some 
of the results of the 9/11 Commission that there are 
vulnerabilities, particularly at the land border, where we do 
have folks who are exempted from certain types of documentation 
requirements, and that we do need to strengthen and close those 
vulnerabilities--strengthen the requirements and close those--
--
    Senator Coleman. One----
    Ms. Dezenski [continuing]. Loopholes.
    Senator Coleman. One last question. You talked about 
biometrics. Is that kind of looking in the eye and seeing 
whether that works for you? Is there thought of using that more 
extensively?
    Ms. Dezenski. Yes, there is. As you know, we have rolled 
out biometrics as part of the US-VISIT entry/exit program, and 
some of the programs that I have mentioned, NEXUS and SENTRI, 
also have biometric requirements. You have to give your 
fingerprints, for example, so we can run the appropriate 
background checks.
    So we think there is lots of applications for biometrics 
along with certain types of chip technologies, use of radio 
frequency technology, for example, to make it easy to move 
through by flashing a card, for example.
    But everything has to be tied into some type of process 
that ensures that you are clean beforehand. So we have a lot of 
work to do in that area, but I think you will see that in terms 
of the development of the exit system and entry system moving 
forward. And, of course, as we look at programs like the TWIC, 
the Transportation Worker Identity Card, although not 
applicable in this instance, it is the same concept, which is 
let us vet--let us make sure that people have access to places 
where they should have access.
    Senator Coleman. All right. My wife is signed up with 
Northwest Airlines. They have a biometric program, and she 
thinks it is great.
    Ms. Dezenski. Yes.
    Senator Coleman. On the other hand, I would suspect that 
there would be a lot of Americans who would be very concerned 
about each of their kids being fingerprinted or the Government 
having on file a biometric pattern for every single person in 
this country. So there are some cultural and practical 
concerns.
    It would seem to me that if we could find a driver's 
license that worked that you could--you know, when I go fish, I 
keep my fishing license and my driver's license in my pocket. I 
do not keep my passport.
    And it would seem that this would be so much simpler if we 
could find some standard kind of identification that people are 
comfortable with that would not create a sense of greater 
intrusiveness and infringement upon some personal privacies, 
because I think you are going to get quite a reaction.
    My last question is: Did anybody respond to the President 
when he raised his concerns?
    Ms. Dezenski. Did we respond within the executive----
    Senator Coleman. Yes. Did you write a letter back or tell 
him that we are rethinking this?
    Ms. Dezenski. I am not aware of any correspondence, but I 
mean we certainly agree with the President that we have to be 
flexible in terms of how we move this forward.
    Senator Coleman. I appreciate that. I am very pleased to 
have a very distinguished ranking member here, Senator Dodd.
    Senator Dodd, I will turn it over to you, both for an 
opening statement and for any questions you may have.

   STATEMENT OF HON. CHRISTOPHER J. DODD, U.S. SENATOR FROM 
                          CONNECTICUT

    Senator Dodd. Thanks, Mr. Chairman. My--is this on? Yes.
    Senator Coleman. Yes.
    Senator Dodd. My apologies for being a few minutes late. I 
had the Woodstock Middle School from Connecticut down, all 800 
of the 8th graders around the steps of the Capitol, so my 
colleague knows what that is like, so--I did not want to be 
late.
    But let me thank you, Mr. Chairman, for doing this, having 
this hearing, and I thank our witnesses as well. This is always 
a tough section to deal with, the consular sections. I admire 
people who get involved in this subject matter. It is hard. And 
I am grateful to you for your dedication.
    I am trying to think. I was recalling as we were looking at 
the map of Minnesota here. I guess a map of Connecticut really 
would not be terribly effective in this discussion, but----
    Mr. Moss. We happen to have one.
    Senator Dodd. I do not know how my colleagues in 
Massachusetts, New York, and Ohio are going to feel about this. 
There are some in my State who think they should have passports 
to come through, but I appreciate you bringing it up. 
[Laughter.]
    I am thinking as I was listening to Norm talk about the 
issues of border towns in Minnesota, a year or 2 ago, 3 years 
ago, I gave the commencement address at the University of North 
Dakota in Grand Rapids, which is a separate story itself, how a 
guy from Connecticut ended up at the University of North Dakota 
giving a commencement address, but it was a great experience.
    I was actually out there a day early, and I wanted to go to 
see Grand Forks, the town. And this was the town, you may 
recall, not many years ago that actually had this huge flood. 
And then in the midst of the flood, the town caught on fire, 
and so they could not even get to the buildings that were 
burning.
    And I met with the mayor and they really did a great job of 
rebuilding that small community in North Dakota. But there was 
a meeting in the mayor's office that morning, and he asked me 
if I wanted to come and attend. And it was on this subject 
matter, ironically, the morning of the commencement address.
    And in the meeting, was--I think he had most of the Federal 
agencies that would be affected--I think the immigration 
office, the customs offices, and so forth, as well as FBI and 
other people were all there to talk about what needed to be 
done.
    And there was one wonderful vignette that occurred, that I 
may have already shared this story with the chairman of the 
committee. One gentleman got up--and Grand Forks, for those who 
are not familiar with where it is, is not that far from the 
Canadian border. I do not know how far, but it is relatively 
close, certainly within a commuting distance for people who 
work back and forth.
    And I forget how many roads there are between Canada and 
North Dakota, but not many actually that cross the border. And 
apparently up until then, at least, border control consisted in 
some areas of putting down two snow cones at 9 p.m. at night 
and then picking them back up again at 9 a.m. in the morning, 
and that was pretty much what the border controls were.
    And one gentleman got up in the room and he had a business 
in North Dakota that employed a lot of people from Canada. And 
he pointed out that his business opened at 8 a.m. in North 
Dakota and that he had quite a few people who crossed the 
border to come to work.
    He said, ``Now, the border does not open until 9 a.m., but 
no one has ever been late for work,'' the point being this is a 
rather porous border at that time going back and forth.
    Anyway, again, I thank the chairman for doing this, and 
obviously this issue goes--is an interest, obviously, to all 
Americans because it speaks very directly to our national 
security issues, economic issues, and public diplomacy 
concerns, which are not an insignificant factor at all, in our 
view. So I thank you for doing this.
    As all of us know, and this may be repetitive, the chairman 
may have made these points, but let me repeat them. Last 
December, of course, the Intelligence Reform and Terrorism Act 
of 2004 was signed into law. The legislation included a 
provision which required the Secretary of Homeland Security, in 
consultation with the Secretary of State, to develop a plan, 
which is what we are there to talk about, that would enable us 
to verify the identity and citizenship of all travelers 
entering the United States.
    This coordination led to the establishment of the Western 
Hemisphere Travel Initiative. According to the Department of 
Homeland Security, this initiative will--and I am quoting--
``require all travelers to and from the Americas, Caribbean, 
and Bermuda to have a passport or other accepted document that 
establishes the bearer's identity and nationality to enter or 
reenter the United States.'' It will also primarily affect two 
groups of people, U.S. citizens who do not currently have valid 
passports and foreign nationals who currently are not required 
to present a passport to travel to the United States, mainly 
Canadian and Mexican citizens.
    In April 2005, DHS announced its plan to implement this 
initiative. Three deadlines--the chairman just recently 
discussed this--have been promulgated. The beginning of 
December 31, it was supposed to take effect for all travel to 
and from the Caribbean, Central America, and South America. On 
December 31, 2006, it will take effect for all air and sea 
travel to and from Mexico and Canada; December 31, 2007, apply 
to all air, sea, and land border crossings.
    And you have indicated that you want a little time before 
the--some adjusting of those dates. Is that what I heard you 
say?
    Mr. Moss. We are certainly looking at the three dates in 
view of the same delays and in view of some of the reactions 
from the public and other governments, especially to the first 
deadline, but clearly we still have to have this program in 
effect by December 31, 2007. That is, of course, written into 
law.
    Senator Dodd. Well, without a doubt, last year's 
Intelligence Reform Legislation was an important milestone in 
beginning to implement the recommendations of the 9/11 
Commission. That legislation rightly addressed the issues of 
cross-border travel and border security and, indeed, the tragic 
events of September 11 made it all too clear that these systems 
were broken and in need of major reform.
    And it is essential that we act, in my view, responsibly to 
tighten our borders to protect America and its citizens.
    I think it is also very critical that when we address these 
issues, we seek to strike a balance--and this is where I would 
like to make some emphasis, if I could--to strike the balance 
between national security interests on the one hand and our 
Nation's economy, its vitality obviously, and public diplomacy 
on the other.
    After all, for years, the United States has been a beacon 
for foreign tourists. This tourism has helped to drive our 
economy even in the worst of times. It has also left an 
impression with tourists of what America is all about, what our 
country means, and who we are as a people.
    And this person-to-person interaction, I think, has helped 
tremendously over the years to spread what America's values are 
and its ideals in a way that I do not think ever gets achieved 
through other means in many ways. And I say that with all due 
respect to other efforts.
    But we should not underestimate the value of what one 
average American--what the impression of one average American 
makes--can make on a first-time visitor to this country or a 
repeat visitor, for that matter.
    First, I would like to touch on just the economic issues, 
if I can. Although there have been modest increases in the 
number of international arrivals in the United States, over the 
past 2 years the number of such arrivals has declined overall 
since 2000. These applications are also down, as are the number 
of visas issued.
    As fewer and fewer people visit our great country, I think 
our economy is going to be hurt by that. This does not only 
affect service industries and restaurants--such as restaurants, 
shops, and hotels, it also affects those who supply these 
industries. So what we could see is a ripple effect in our 
economy.
    Second, I think we must not overlook the public diplomacy 
issues, which are at stake here as well, and we should not 
underestimate them. Namely, when foreign citizens, I mentioned 
a minute ago, visit the United States, they have an opportunity 
to see our land firsthand and to meet our people, average 
people, firsthand. They interact with Americans and they get a 
chance to experience the freedom and democracy, which rightly 
make us proud as citizens of this great country.
    In essence, this person-to-person contact allows American 
citizens here to become ambassadors of American ideals, without 
ever having to leave their communities.
    And equally as important, it also turns those who visit our 
Nation into our unofficial ambassadors when they return to 
their countries. The importance of this dual effect should 
never be taken for granted, and I hope it never will be.
    Last, there is another impact that we often do not take 
into account, and that is the possibility of reciprocal 
restrictions imposed by foreign nations on U.S. travelers. 
After all, as we--when we tighten our restrictions here, other 
countries may do the same, so we must ensure that any reforms 
we implement would be equally palatable if they are imposed on 
Americans traveling abroad. Otherwise, we could risk 
complicating the process for many thousands of our citizens who 
travel on personal and business reasons. And complications 
arising from such a situation could have a further negative 
effect on our economy here at home.
    None of this, of course, should take away from the 
legitimate and vital need to protect our national security and 
our borders, which is why the Western Hemisphere Travel 
Initiative is the topic of our hearing here today.
    But it certainly is my hope that as we move forward with 
this program, that we will always seek to strike that balance, 
that reasonable intelligent balance that protects our security 
and keeps us open as a welcoming place, as we have been for so 
many decades.
    And I am also struck, Mr. Chairman, by the fact that in so 
many instances, of course, we fail to appreciate how 
intelligent and--unfortunately, how intelligent these--some of 
these terrorists can be, and the idea that they are going to 
follow a normal pattern of behavior to come into our country 
is--I think can be terribly naive with their determination to 
get here.
    And so we need to make sure that we do not give these 
terrorist organizations far greater victories than they have 
already achieved in many ways.
    I want to say terrorism--terrorists are less concerned 
about the damage that they do with a specific attack. The real 
rationale is the effect of the attack. What do we do as a 
result of what they have done?
    And, in a sense, you are watching a lot of these things and 
I am worried in some ways that we try to fix everything, and we 
become so restrictive that we lose the essence of who we are 
and what we stand for as a people.
    So, just a couple of quick questions for you, and the 
chairman sort of touched on them a bit here. And I will try to 
be fast on these, as well--we have got another panel to come--
but I am just curious as to whether or not any assessments have 
been made as you are looking at this. And if you have not, 
yourself, are others doing this on things like NAFTA?
    I was a supporter of NAFTA. I believe it was very important 
for us. And are we looking here--are we seeing any effects of 
this? And, if so, we ought to--that ought to be part of the 
discussion, it seems to me, as we go forward.
    I hope to be a supporter of CAFTA. We are having 
discussions about that and hopefully--and this is not a--this 
is going to be a tough battle in any circumstances--and the 
implications could be very important, if we do not get this 
right.
    But I do not need to tell you how important it is going to 
be if that is to work, that there be a free flow here, back and 
forth. If there is not, then we can end up passing a trade 
agreement that has less of the positive impact than we would 
like to have because of actions we are taking that may appear 
unrelated to some, but it will be very directly affected.
    I am curious about the tourism issue, and I mentioned here, 
but I wonder if you are seeing any reaction to this at all?
    The public diplomacy--again, I mentioned the visa 
applications, and the numbers are declining. We have raised 
issues--I know we did with Condoleezza Rice. I think we all 
raised the questions when she was here, in this very room at 
her confirmation hearing, the concerns we have about the number 
of students who are coming here and how--what a benefit this 
has been to us over the years to have these students who come 
to the United States to get undergraduate degrees or graduate 
degrees. And we are watching a decline, not so much in the 
graduate degree area, but the undergraduate degree area.
    And I know there are steps being made to try and deal with 
that, but I have run into it several times in other countries 
where I have been. It has been raised by foreign nationals 
there about what has happened, several cases of their own 
students deciding to go to Europe, deciding to go to India, 
going to China to study, because it was far easier for them to 
go there to get an advanced degree than come here.
    I hope I do not have to preach to anyone about the value 
that has been to us, particularly since the post-World War II 
period, of the literally hundreds of thousands of people. In 
fact, I was struck when President Bush was in Georgia recently 
and, of course, welcomed ceremoniously by this wonderful new 
president, who by the way got a degree at Columbia University.
    You run into this all the time around the world. I 
certainly have.
    My brother taught at Georgetown for 27 years in the foreign 
service school. And I cannot go to a country in Latin America--
literally cannot go to one where I do not run into some 
minister or some businessperson that had my brother as a 
professor over the last 27 years that was at Georgetown 
University.
    I hope in our effort to get better on the national security 
issues we are not going to watch that kind of flow be damaged. 
So I would be interested in your observations you are making 
about that.
    And the reciprocal question--ironically, this morning I was 
out getting a haircut, and the fellow who is the barber has a 
daughter who is at Georgetown, who is going to Chile to do--she 
is at Georgetown, a junior at Georgetown. She is going to do a 
semester in Santiago, Chile. He was describing to me the amount 
of work that is being required of her by the Chilean Embassy 
for her to go down as a student.
    And without thinking necessarily about the hearing this 
afternoon, I was curious as to whether or not we are watching 
the Chilean Government all of a sudden ratcheting up the kinds 
of requirements that they are imposing upon kids going down to 
study in response to what we may be asking of them.
    If that is a fact, then so be it, if that is what we have 
to go through. But I am curious as to whether or not you are 
seeing any trend lines here on reciprocal behavior. So there is 
a series of questions there, some of which go beyond your 
direct portfolio, but obviously you are going to be--you are 
important witnesses to us.
    And, again, I thank you for what you do. I have a deep 
appreciation for people in the consular section. It can be a 
thankless job and really do--you do tremendous work.
    I have been in offices all across the world and to sit in 
there and watch what--the lines that form around our consular 
offices everywhere in the world, people seeking to come here 
for one reason or another, and the job, day in and day out, to 
be there, to process that and make determinations, I wish more 
Americans could watch people do it, the respect they should 
have for people who do this job, in my view, is just--I--and 
the respect I have is tremendous. So I thank you on behalf--if 
you could mention to your staff and others how much this 
Senator appreciates the work your people do.
    Mr. Moss. Senator, thank you very much for your kind words 
about my colleagues in the consular services around the world 
and I also take that as applying to my colleagues and my staff 
who process and get passports here in the United States.
    If I could try and touch on the issues you just raised, 
first of all, an important element in our rulemaking process 
will be the fact that we are required to do an economic 
analysis of the Western Hemisphere Travel Initiative. We have 
split lead responsibilities on different aspects of that. That 
actually rests with staff of the Department of Homeland 
Security, but they will be looking very closely at the economic 
analysis, the NAFTA issues, the tourism issues, things of this 
nature.
    In terms of the tourism issue, one thing that I can tell 
you for sure is that several of the Caribbean countries have 
expressed reservations over the current timing cycle that we 
have. They are concerned that this may, in fact, disadvantage 
tourism to the Caribbean versus going to Mexico for the coming 
2005/2006 tourism season. That is one of the reasons why we are 
also taking a second look at the ANPRM.
    In terms of the public diplomacy, the number of students, 
obviously this is not a Western Hemisphere issue, because 
clearly the Western Hemisphere program largely affects the 
travel of American citizens, but it is certainly an issue that 
we are well aware of your views on, as well as that of the 
chairman.
    I think we are doing a much better job on this issue. For 
example, during the summer period when students are trying to 
get their student visas, we have expedited appointment systems 
for them and things like this.
    We certainly recognize, as you have so eloquently stated, 
the value of an American education, literally the one-to-one 
relationships, as you put it, for the American ambassador in 
the small town in the United States or the university 
professor. I think we are doing a very good job at that. Can we 
do better? Obviously, we are always looking for opportunities 
to improve.
    You are right about a decline in visa applications since 
2001. I think that decline has largely leveled off, but 
certainly it has not begun to recover to the levels we saw 
then. However, those levels may have been slightly inflated by 
some work we were doing in Mexico in the 1999-2001 period. But 
the reality is still, we are processing fewer visas than we 
were a few years ago.
    In terms of reciprocity, I think there has been a general 
tightening of visa requirements around the world. You are 
talking about the daughter of your barber and the steps she has 
to take to get a visa to be a student in Chile. I really think 
the governments around the world do want to have a better 
understanding of who is in their country and who is leaving 
their country, in much the same way as we are trying to do 
through our US-VISIT program.
    In terms of issues like the collection of biometrics, we 
are certainly seeing biometrics becoming a more widespread 
phenomenon in the visa world. The European Union is moving in 
that direction. At least one other country I can think of, 
after we imposed our fingerprint requirement a year and a half 
ago, did impose a requirement on American citizens. That has 
been more the exception than the rule, but it has happened.
    But certainly it is something that we recognize. But, of 
course, sovereign governments are making their own decisions 
right now on who they wish to admit and what types of screening 
they may subject people to before they come, just as happens, 
quite honestly, not just with students but with casual visitors 
as well.
    Senator Dodd. Yes.
    Mr. Moss. I hope that helps to answer some of your 
questions.
    Senator Dodd. It does. It does.
    Mr. Moss. Thank you.
    Senator Dodd. And I appreciate that. And you will keep us 
posted, because I think this is going to be a story that is 
going to develop and I would be very interested in how it is 
working and maybe keeping the subcommittee and the full 
committee up to speed on a regular basis on what these numbers 
are looking like, because the trend lines, I think, will be 
important for us to watch.
    Mr. Moss. I certainly appreciate that offer. I know my 
colleagues from our public affairs and congressional relations 
office talk all the time to your staff, but we will make 
certain that they routinely see data on visa applications, and 
we can also share with them the data on passport applications, 
where, of course, the numbers are trending very much in a 
different direction up, upwards.
    Senator Dodd. Let me ask a naive question. I apologize for 
this, and I will wrap this up here.
    Are we rotating--I mean I use the old cone system. You 
know, you are in the consular section and obviously you have 
people who make careers of it, but are we trying to move people 
in and out, as well? Because I know it can--this is very trying 
work and----
    Mr. Moss. You are absolutely right, it is very trying work. 
And it is certainly work virtually all officers do within their 
first couple of tours.
    And then people begin to specialize in it and do it for the 
rest of their career. It is certainly considered a core 
responsibility of the State Department, and it is something in 
which we want all of our officers to have expertise, not just 
in a classroom setting, but actual hands-on practice. So we 
really view our ability to take our entry-level officers and 
have them experience consular work as a real benefit, not just 
for the provision of the service, but really to help them with 
their language skills and help them understand the country to 
which they are assigned.
    Senator Dodd. Yes. I just--you know, one thing and, again, 
I turn to our offices, our district offices where, at least in 
my case, all of the case work is done. I do not know whether 
Norm does the same thing or not, but it is tough work to be a 
caseworker day in and day out on veterans issues or Social 
Security, problems coming in.
    The effort we can make, and I want to say this carefully, 
because I do not want it to appear as though I am negating what 
I said earlier in commending, but the ability to be good 
diplomats, too, with those people coming in, the sense of fear 
that someone could have as a foreigner walking into that 
consular office and hoping and praying that they can get that 
visa to visit a family member or something else, and how they 
are received and how they are welcomed, even when, obviously, 
there are suspicions and so forth, they decide to turn people 
down, and I--for many people that is the only contact they will 
ever have with us.
    And I do not know to what extent we really work at training 
people on that aspect of this, but I suspect you know what I am 
driving at here.
    Mr. Moss. Absolutely. I think I can probably speak of it a 
little bit more directly from the passport side, but you 
certainly go through the same process. You are coming into a 
government office. You have just been through a security 
screening process. Both on the visa side and the passport side, 
and, of course, on our citizen services side, we pride 
ourselves on delivering services using the best principles of 
customer service.
    On the passport side, we are very proud of the fact that in 
the recent University of Michigan surveys that are done on 
customer service throughout the United States, we actually 
scored considerably above the standard for American corporate 
customer service.
    The obvious issue for the visa process is, of course, that 
sometimes you have to say ``no'' to the applicant. What we try 
and explain to our officers, and we think we are very 
successful at that, is there is a way to tell someone ``no'' in 
a polite fashion so that they understand why. And they may not 
go away happy, but they, at least, go away believing you made a 
considered judgment in their case.
    Senator Dodd. Now, what are all these dots on the map in 
Connecticut for? What does that mean?
    Mr. Moss. I am sorry.
    Senator Dodd. Passport acceptance facilities.
    Mr. Moss. Those are some 220 different facilities around 
the state of Connecticut. They are post offices, clerks of 
court, other facilities, where someone can begin the passport 
application process.
    Senator Dodd. Oh, okay.
    Mr. Moss. This was in terms of the fact that we do--we may 
only have passport agencies in 16 cities--of course, one of 
which is in your State--but we do try and make the process as 
transparent and as simple as possible by having literally 
thousands of acceptances.
    Senator Dodd. I thought--as you go down to Stanford, 
Connecticut, you know, I was looking at one of these dots in my 
own hometown. I thought, how did I miss this?
    Mr. Moss. Well, excuse me. In fact, the agency is actually 
now in Norwalk, but in obviously the same, very much----
    Senator Dodd. Okay.
    Mr. Moss [continuing]. The same general area.
    The point is here, though, for your constituents they do 
not have to go to Norwalk to get a passport. They can go into 
their local post office.
    Senator Dodd. Yes.
    Mr. Moss. And I will put in another plug for our Web site. 
If you go to travel.state.gov, you can find this not just for 
Connecticut and Minnesota, but for every State in the United 
States, including directions, their operating hours, things of 
this nature.
    Senator Dodd. Thank you very, very much.
    Mr. Chairman, I thank you for letting me take so much time.
    Senator Coleman. Thank you, Senator Dodd. I would note that 
you have much more extensive coverage in Connecticut than we do 
in Minnesota.
    Senator Dodd. Yes. I do not think that was really smart to 
have Minnesota having fewer dots up there than Connecticut. I 
was not going to mention that, Mr. Chairman, but----
    [Laughter.]
    Mr. Moss. Mr. Chairman, we are always looking for 
additional opportunities and additional post offices and clerks 
of court. We would be happy to work with you and your staff to 
identify more.
    Senator Coleman. I think the key is--and I will just end on 
this, the challenge, particularly being a border State, and if 
you look at the map of Minnesota, you can see in the border 
areas, there is not the coverage, and those are the ones most 
affected. And so I really think you have to look at that.
    There are four points I am going to make that I really want 
you to consider. When we look at other documentation, I think 
we need to expand the type of documents. And the fact is that 
SENTRI and NEXUS, really at this point, are not beneficial in 
terms of ease of getting them and applicability to some of 
these vast numbers, at least at the daily border crossings that 
people make in a State like Minnesota. And I would suspect if 
Chairman Collins were here, she would have the same 
perspective.
    Second, and it ties into this, just making it easy as 
possible to get these documents. Particularly in those places 
where people's lives are going to be impacted on a regular 
basis. We have to reflect on that.
    Third, the timing. You have already reflected some 
sensitivity to that, and this committee appreciates that. But 
the more time to plan, the less disruptive the implementation. 
And there needs to be ample time after the notice of rulemaking 
is out so folks can respond, and so those responses are taken 
into consideration.
    Last, and not least, get the word out. You have got to let 
people know what we are looking at. Whatever we do, there are 
going to be significant changes. The system is different. When 
you have only 20 percent of the population with passports, you 
are talking about a massive change in human behavior, in 
American behavior, and I, like Senator Dodd, I worry about the 
impact. I worry about whether we have studied it. And once it 
happens, it happens. And the sensitivity, particularly in 
border areas, Senator Dodd, is that these are places that right 
now they are scraping to get by.
    Senator Dodd. Yes.
    Senator Coleman. They do not have the masses of population. 
They do not have the masses of economy diversity and 
opportunity, so you hit them in the gut on a travel piece, on a 
small, little thing, on what may be a little economic 
development to somebody in Stanford or Bridgeport or New Haven 
or Minneapolis, St. Paul----
    Senator Dodd. Yes.
    Senator Coleman [continuing]. It may be a little thing to 
them, but it is what they've got. And so I think we have got to 
be very careful and carefully understand the impact.
    Senator Dodd. Yes.
    Senator Coleman. So I thank both the witnesses. I thank you 
for the work that you do, and I look forward to continue 
working with you.
    Mr. Moss. Thank you very much.
    Ms. Dezenski. Thank you, Mr. Chairman.
    Senator Coleman. Thank you.
    Our second panel will shed some light on how the Western 
Hemisphere Travel Initiative will impact the travel industry 
and how it fits into the overall picture of North American 
border security.
    First, we will hear from Mr. Paul Ruden, Senior Vice 
President for Legal and Industry Affairs for the American 
Society of Travel Agents, ASTA, the world's largest association 
of travel professionals, including travel agents and the 
companies whose products they sell, ranging from tours to 
cruises to hotels and so on.
    Mr. Ruden has been with ASTA since 1990, in this capacity 
and as acting chief operating officer. Prior to joining ASTA in 
1990, Mr. Ruden was in private law practice in Washington, DC, 
for 19 years.
    Mr. Ruden worked as a trial attorney at the Civil 
Aeronautics Board from 1967 to 1969.
    Our final witness will help us put this issue into the 
broader context. Dr. Robert Pastor is vice president of 
international affairs and professor of international relations 
at American University, where he established and directs the 
Center for North American Studies, a public policy research and 
educational center.
    Previous to his position at American University, Dr. Pastor 
was a professor of political science at Emory University and 
founding director of the Carter Center's Latin American and 
Caribbean program and the Democracy Project. He was director of 
Latin American and Caribbean affairs at the National Security 
Council from 1977 to 1981.
    Dr. Pastor was also vice chair of the Council on Foreign 
Relations Task Force on the Future of North America.
    Before we begin, I would like to enter three statements 
into the record, a statement from the United States Chamber of 
Commerce, a statement from Mark Travel Corporation, and a 
letter from the Travel Industry Association. And they will be 
entered without objection.
    [The information follows:]
                         Chamber of Commerce of the
                                  United States of America,
                                      Washington, DC, June 8, 2005.
Hon. Norm Coleman,
Chairman, Western Hemisphere, Peace Corps and Narcotics Affairs 
        Subcommittee, Senate Committee on Foreign Relations, 
        Washington, DC.
Hon. Christopher Dodd,
Ranking Member, Western Hemisphere, Peace Corps and Narcotics Affairs 
        Subcommittee, Senate Committee on Foreign Relations, 
        Washington, DC.
    Dear Chairman Coleman and Ranking Member Dodd: On behalf of the 
U.S. Chamber of Commerce, I would like to thank you for holding a 
hearing this week on ``Safety and Convenience in Cross-Border Travel: 
An Analysis of the Western Hemisphere Travel Initiative.'' The U.S. 
Chamber of Commerce is the world's largest business federation, 
representing more than 3 million businesses of every size, sector, and 
region. Thus, proper implementation of the Western Hemisphere Travel 
Initiative (WHTI) is of tremendous importance to us and we welcome the 
opportunity to submit these written comments in anticipation of the 
Advance Notice of Proposed Rulemaking expected to come out later this 
month. I would also like to take the liberty of requesting that this 
letter be included in the hearing record.
    Our main concern with the WHTI is with the implementation of the 
land border-crossing requirements to be phased in by 2008. It is 
impossible to quantify, with any precision, the commercial impact of 
the new document requirements under the WHTI because we still do not 
know what the new document requirements will be. However, it can be 
reasonably estimated that if the document requirements are too strict, 
the impact on the American economy will be severe. Clearly, if 
documentation such as SENTRI, NEXUS, FAST, and BCC program cards are 
acceptable substitutes for a passport, the impact will be lessened.
    The main debate, however, revolves around the acceptance of driver 
licenses together with birth certificates as a proper substitute to a 
passport in land border crossings. It is the chamber's position that if 
licenses and birth certificates comply with certain requirements--
especially given the new requirements found in the REAL ID Act--they 
should also be authorized as appropriate substitutes to a passport. 
Section 7209 of the Intelligence Reform and Terrorism Prevention Act of 
2004, the legal basis for the new regulations, clearly states that a 
passport substitute should be another document ``or combination of 
documents'' that are ``sufficient to denote identity and citizenship.''
    This language would clearly allow for acceptance of a driver's 
license with a birth certificate--the best known combination of 
documents that denote identity and citizenship. We understand that 
training costs for border personnel may be less under a restrictive 
program authorizing a very limited range of documents; however, the 
possible commercial costs of a restrictive program must also be 
weighed.
    For example, Canadian visitation to the United States alone is far 
greater than from any other foreign nation. There were 34.5 million 
visits by Canadians to the United States in 2003, which had a $10.9 
billion impact on our national economy. At the same time, fewer than 40 
percent of Canadians hold passports and even a smaller percentage of 
children hold passports.\1\ Thus, communities that cater to family 
vacationers face the prospect of losing a substantial number of the 
market audience. Further, many older Canadians own, rent, or lease 
residences in the United States for extended periods of time. While it 
is possible they would go through the process of obtaining a passport, 
visits by vacationing younger relatives would very likely be 
diminished.
---------------------------------------------------------------------------
    \1\ 1 Data obtained from the Canadian Consulate in Buffalo, NY, by 
the Buffalo Niagara Partnership.
---------------------------------------------------------------------------
    The Buffalo Niagara Partnership, the Detroit Regional Chamber, and 
the Bellingham/Whatcom Chamber, which together represent employers in 
three border States that conduct over $60 billion in annual bilateral 
trade with Canada, are an integral part of the local efforts by 
chambers of commerce, from San Francisco to Baltimore, in seeking the 
continuation of driver licenses with birth certificates as substitutes 
to passports. As these groups pointed out, last week in a letter to 
other chambers, a restrictive program would have an impact well beyond 
border communities.
    Unfortunately, the Departments of Homeland Security and State have 
been dismissive of authorizing acceptance of a combination of a driver 
license and a birth certificate as a passport substitute. They 
acknowledge that a birth certificate and a driver license are 
sufficient to establish nationality and identity for the purpose of 
obtaining a passport. However, they argue that the difficulty of 
training border officers to determine the validity of these documents 
makes impossible to allow them to be acceptable substitutes to 
passports. This determination seems to have been made without a 
discussion with the States/provinces, business interests, and other 
affected parties, on possible fixes to their concerns.
    In fact, new laws, such as the REAL ID Act, are undermining the 
Departments' position, given that driver licenses and birth 
certificates are becoming increasingly more secure. States have already 
been moving toward making these documents machine readable, coded with 
biometric identifiers, and other security and tamper resistant 
features. We are not advocating for the acceptance of ``baptismal 
records, certificates of naturalization, [and] certificates of 
identity,'' \2\ which the Departments seem to be concerned about. We 
also understand that there are multiple State/provincial driver 
licenses and birth certificates. However, we believe the solution is in 
having reasonable prerequisites for the acceptance of driver licenses 
with birth certificates rather than to eliminate outright their 
acceptance, especially since they do, by the Departments own admission, 
serve to prove both identity and citizenship.
---------------------------------------------------------------------------
    \2\ Answer by U.S. Customs & Border Protection to ``Frequently 
Asked Questions,'' also available at www.customs.gov/xp/cgov/travel/
vacation/kbyg/west_hem_faqs/dhs_faqs.xml.
---------------------------------------------------------------------------
    It is imperative that the Departments of Homeland Security and 
State reach out to all sectors affected by any change at the border and 
work with them to find solutions that facilitate trade and travel 
without jeopardizing national security. In the past private/public 
partnerships, such as the Data Management Improvement Act (DMIA) Task 
Force, which the chamber served on, have been instrumental in reaching 
consensus on difficult border issues. Solutions will require 
flexibility and may well require different identification systems for 
different types of visitors. Taking reliable documents ``off-the-
table'' without substantial and formalized discussions with affected 
businesses would lead to a program that unduly penalizes American 
business and the American economy.
    We appreciate the opportunity to provide these comments on the 
topic covered at the hearing, and the U.S. Chamber looks forward to 
continuing our relationship with the subcommittee and the Departments 
of Homeland Security and State to address these issues.
            Sincerely,
                                 Randel K. Johnson,
                                     Vice President, Labor,
                                 Immigration and Employee Benefits.
                                 ______
                                 
                                 Wiley Rein & Fielding LIP,
                                      Washington, DC, June 7, 2005.
Hon. Norm Coleman,
U.S. Senate, Hart Senate Office Building,
Washington, DC.
    Dear Senator Coleman:  On behalf of Tammy Lee, Vice President, 
Corporate Affairs of the Mark Travel Corporation, l ask that the 
enclosed testimony be placed in the record for the June 9 Committee on 
Foreign Relations hearing on ``Safety and Convenience of Cross-Border 
Travel.''
    This is an extremely important issue to Mark Travel, one of the 
largest tour operators in North America, and its customers. There is 
significant concern about the ability of government agencies to process 
all passports from cross-border operations that would be needed under 
recent changes enacted by the Department of State.
    Considering the importance of travel and tourism to the economic 
health of this country, it is important that actions not be taken that 
will discourage people from traveling.
    Please let me know if you have any questions.
            Sincerely,
                                                Edward P. Faberman.
    Enclosure.

Prepared Statement by Tammy L. Lee, Vice President, Corporate Affairs, 
                      the Mark Travel Corporation

    Chairman Coleman, Senator Dodd, and distinguished members of this 
committee, on behalf of the more than 1 million passengers our company 
carries to Mexico and the Caribbean, I respectfully ask you to consider 
a short delay of the new requirements for cross-border travel recently 
proposed by the State Department and Department of Homeland Security.
    While we support the stricter border security proposals and agree 
with the need to protect the Nation's borders, we believe the proposed 
timeline will negatively impact the travel and tourism industry at a 
time when the industry is still somewhat stagnant--but showing positive 
signs of future growth and expansion.
    Moreover, the new requirements will create unanticipated added 
costs for travelers who have already booked their vacations; and will 
place an extraordinary burden on the Department of State's ability to 
process all of the new applications in such an abbreviated timeframe.
    In short, we all need more time to plan appropriately for the new 
requirements and execute the plan. The end of this year simply isn't 
enough time for the industry, the government, or consumers.
    Here is why we are so concerned about this.
    The Mark Travel Corporation is one of the largest tour operators 
and vacation packagers in North America.
    We carry about 2.6 million passengers each year, and operate 16 
vacation companies including: United Vacations, US Airways Vacations, 
Southwest Vacations, Midwest Airlines Vacations, ATA Vacations, Funjet 
Vacations, Funway Holidays, Mountain Vacations, Vacations by Adventure 
Tours, TransGlobal Vacations, MGM Mirage Vacations, Blue Sky Tours, 
Mark International, Conquest Vacations, Las Vegas and More, and 
Showtime Tours.
    Of these 2.6 million passengers, annually, we carry about 1 million 
passengers to Mexico and approximately 130,000 passengers to the 
Caribbean.
    We estimate that only 20-30 percent of our passengers currently 
have passports.
Challenges to meeting the proposed timeline
    The new regulations would require all travelers entering or 
reentering the United States from Bermuda and nations of the Caribbean, 
Central and South America to show passports starting December 31 of 
this year. In addition, it would require passports for all travelers 
entering the United States by air and sea from Mexico and Canada by 
December 31, 2006, and extend the same requirements for all cross-
border travel beginning December 31, 2007.
    This proposal will immediately affect our company's 130,000 
passengers to the Caribbean. It also immediately impacts other tour 
operators and vacation packagers as well as the hundreds of thousands 
of cruise ship passengers who currently sail without passports. The 
following year, our 1 million passengers to Mexico would be similarly 
impacted.
Implementation must be fair and equal for all sectors of the industry
    Regardless of whether you are a tour operator, cruiseline, or other 
vacation retailer--we all face the same negative and cumbersome 
challenges in complying with this timeline.
    We have heard from several sources that the cruiselines may be 
asking for an exemption from this policy and extension of the 
deadlines.
    If such an extension is granted for one travel industry sector, it 
must be granted for all.
    We all compete for the same customers and giving one group of 
travelers an exemption would be anticompetitive and unfair.
    By giving an exemption or extension to one industry sector, such as 
the cruiselines, the Government would create an unlevel playing field 
and drive customers (particularly cost-conscious travelers) to choose 
the vacation option that doesn't require the passport expense or 
hassle.
More time equals better implementation
    With all of these complexities and considerations, we all need more 
time to sort through the impacts and put together a well thought out 
plan for compliance.
    Otherwise, implementing the new requirements according to the 
current timeline could quickly become a customer relations quagmire and 
open Pandora's Box for passport processing.
    But most importantly, imagine the problems that this timeline would 
create for a large family or group planning an end-of-year vacation.
    Therefore, we strongly urge you to delay implementation of these 
requirements.
Justification for an extension
    Complying with the new requirements is extremely problematic given 
that:

   The State Department issues about 8.8 million passports each 
        year and currently has the capacity to issue 10 million.
   The requirement could result in the need to issue 
        approximately 17 million new passports each year.
   To meet this new demand, the State Department has said it 
        may open new regional passport offices in Denver, Atlanta, and 
        other cities. However, new offices are not yet open and 
        operational.
   The State Department has not completed the recruitment and 
        hiring process for the hundreds of new workers needed to comply 
        with nearly twice the number of anticipated new passport 
        applications.
   The Department of State (DOS) and Department of Homeland 
        Security (DHS) still have not issued a formal Advance Notice of 
        Proposed Rulemaking on the new passport requirements--which 
        they were expected to do in mid-May.

    To properly implement the new requirements the government, travel 
industry, and traveling public all need more sufficient notice.
Recommendations
    With these factors to consider, we recommend the following:

   Direct DOS and DHS to immediately initiate the formal 
        rulemaking process to get additional comments from travel and 
        tourism on impacts.
   Delay the passport requirements for the Caribbean 1 year to 
        December 31, 2006.
   Delay new passport requirements for reentry by air or sea 
        from Mexico an additional 6 months to June 1, 2007.
   Request from the Appropriations Committee an allocation for 
        a public awareness campaign on new passport requirements to be 
        executed at the airports (at the ticket counters, screening 
        areas, and customs inspection areas) and signage and marketing 
        materials at all border-crossing check points.

Benefits of extending the implementation
    Delaying the implementation timeline gives the United States travel 
and tourism industry the time to work with our marketing counterparts 
in the Caribbean and Mexico (the Caribbean Tourism Organization, 
Mexican Government, and convention and visitors associations) and 
create joint promotional campaigns to continue to stimulate United 
States vacation traffic to this region.
    We would also have more time to work with our suppliers in these 
regions to offer marketing incentives to help defray the costs of the 
passports. Large resort companies, such as SuperClubs, are already 
starting to do this, but more time is needed for a more coordinated 
effort.
    We would also have adequate time to upgrade our technology systems 
to be able to collect passport information and also alert customers who 
book vacations to Mexico, the Caribbean, or Canada, about the new 
passport requirements prior to them booking their vacations and 
applying payment.
    Failing to alert customers of the new passport requirements in a 
proactive manner will certainly result in great customer 
dissatisfaction, higher cancellation rates, and more losses for our 
industry.

Conclusion: Support . . . but delay
    In conclusion, we join the administration in support of the new 
recommendations to enhance border security, but ask that the proposals 
be implemented on a more reasonable timeline.
    Doing so allows the State Department to hire additional workers for 
passport processing and train new and existing border-crossing and 
customs officials as well as allows us the necessary time to put into 
place a customer-friendly program to continue to encourage cross-border 
travel, without suffering additional staggering losses to our business.
    Thank you, sincerely, for your consideration of our request. If we 
can be of assistance in the implementation of this new requirement, or 
other reasonable measures to improve border security, we would be happy 
to do so.
                                 ______
                                 
                    Travel Industry Association of America,
                                      Washington, DC, June 9, 2005.
Hon. Norm Coleman,
Chairman, Western Hemisphere, Peace Corps and Narcotics Affairs 
        Subcommittee, Committee on Foreign Relations, U.S. Senate, 
        Washington, DC.
Hon. Christopher J. Dodd,
Ranking Member, Western Hemisphere, Peace Corps and Narcotics Affairs 
        Subcommittee, Committee on Foreign Relations, U.S. Senate, 
        Washington, DC.
    Dear Chairman Coleman and Ranking Member Dodd: I am writing to you 
on behalf of the Travel Industry Association of America's more than 
2,000 member organizations both to thank you for holding this hearing 
on the Western Hemisphere Travel Initiative (WHTI) and to express our 
industry's concern regarding its potential impact on travel and 
tourism.
    The Travel Industry Association of America (TIA) has a long history 
of working with Congress and the executive branch on issues impacting 
international travel to the United States. TIA's mission is to promote 
and facilitate increased travel to and within the United States. Long 
before the events of 9/11, TIA worked hard to promote international 
travel to the United States while supporting Federal efforts to enhance 
U.S. border security. Today we believe more than ever that this Nation 
can foster increased international travel and trade while at the same 
time incorporate new procedures designed to enhance U.S. homeland 
security.
    Programs such as US-VISIT (United States Visitor and Immigrant 
Status Indicator Technology) and the incorporation of both machine-
readable passports and biometric passports are all supported by TIA and 
the U.S. travel industry. In most cases, the only question is whether 
or not the timing of such new programs and requirements can occur in a 
manner that does not significantly disrupt inbound international 
travel.
    In the case of the WHTI, TIA and its member organizations strongly 
support the move toward the use of passports or similar secure 
documents that permit preregistered travelers to cross the U.S. border 
with Canada or Mexico. We agree that U.S. security will be enhanced 
with this move toward the wider use of passports for entry into the 
United States by U.S. citizens and citizens of Western Hemisphere 
countries.
    As in the past, our major concern lies in the timing of such a new 
requirement. The only mandate by Congress was to commence the use of 
passports or similar secure documents no later than January 1, 2008. 
The three-step phase-in of this requirement has been preliminarily 
proposed by the Departments of State and Homeland Security, and will 
reportedly be in a proposed rulemaking that has yet to be released.
    We understand the Federal Government's desire to phase in the WHTI 
in order to ease the administrative burden of implementing it in its 
entirety on December 31, 2007, but in doing so the Federal Government 
will be creating unnecessary hardships on travelers and the U.S. travel 
industry that could potentially lead to billions of dollars in lost 
visitor revenue. Easing the Federal Government's administrative burden 
by shifting the onus to domestic and international visitors and the 
travel industry does not advance our Nation's economic, foreign policy, 
or homeland security interests.
    TIA's members have raised several concerns with the WHTI, including 
the impact on the following travel sectors:

--Cruise travel, since the majority of cruise visitors departing the 
    United States and traveling the Caribbean or up to Alaska via a 
    Canadian port do not currently carry U.S. passports;
--Student and youth travel, both for American students traveling into 
    Canada, Mexico, and other areas, and for students entering the 
    United States from Canada and other countries; and
--Cross-border bus tours between the United States and Canada and 
    Mexico, and whether or not these visitors would be negatively 
    impacted by the cost of obtaining a U.S. passport.

    TIA is currently working with more than 30 travel and tourism 
associations that all participate in the Travel and Tourism Coalition 
to develop an official, industrywide position paper on the Western 
Hemisphere Travel Initiative, which will be submitted in response to 
the anticipated proposed rulemaking.
    We appreciate the opportunity to express our support for the 
concept of moving to passports or other secure documents in order to 
enhance our Nation's homeland security, while at the same time 
expressing our concern regarding the timing of such a program and its 
likely negative impact on the U.S. travel industry.
    We thank you in advance for entering this letter into the official 
hearing record in conjunction with your subcommittee's hearing on June 
9, 2005.
            Regards,
                                              Roger J. Dow,
                                                 President and CEO.

    Senator Coleman. Mr. Ruden, we will begin with your 
testimony. Please keep your remarks to 5 minutes, and your 
complete written statement will be entered into the record.
    And then Mr. Pastor, we will follow with you.
    Mr. Ruden.

STATEMENT OF PAUL M. RUDEN, SENIOR VICE PRESIDENT OF LEGAL AND 
  INDUSTRY AFFAIRS, AMERICAN SOCIETY OF TRAVEL AGENTS, INC., 
                         ALEXANDRIA, VA

    Mr. Ruden. Thank you, Mr. Chairman. The American Society of 
Travel Agents appreciates your leadership in calling this first 
hearing into these important issues and is grateful for the 
opportunity to present the views of a broad range of interests 
in our industry.
    To be absolutely clear, we and our related industries 
concur fully with the need to improve security at all U.S. 
borders and other points of entry. Sustaining consumer 
confidence to travel freely in the post-September 11 world is 
critical to the vitality of the national economy.
    At the same time, we will gain little by achieving absolute 
security if fewer and fewer travelers are willing to run the 
security gauntlet. The goal should be a tourism policy that 
allows U.S. citizens to travel abroad free of unreasonable 
restrictions--a careful balancing between security and tourism 
concerns, as both you and Senator Dodd have indicated.
    We respectfully submit that the WHTI, as proposed, fails to 
strike that balance and will have a devastating impact on the 
businesses and millions of jobs that comprise and depend upon 
the travel and tourism industry.
    First and most importantly, there is insufficient time to 
implement the first phase of a new document program by the 
first announced effective date of December 31, 2005.
    Even if, contrary to experience, the administrative 
processes can be completed swiftly, there will be insufficient 
time to educate the public about the regime and secure 
widespread compliance. Given these obstacles, a compelling case 
for rushing to a new system does not exist. It is not legally 
required, and no security crisis involving American travelers 
seeking to reenter the country has been identified.
    Further, requiring passports will create a major new 
obstacle to millions of people who are otherwise ready to 
travel, including the growing numbers who make their travel 
plans close to departure. Passports are expensive to obtain and 
require significant advance planning.
    Document alternatives, that themselves require a passport, 
are not an improvement as to cost or advance planning issues 
and are not solutions for most travelers most of the time.
    Many travelers, including many students and senior 
citizens, especially in the border States, have enjoyed the 
freedom to travel to Canada, Mexico, and the Caribbean, relying 
instead on documents they already possessed, such as a driver's 
license or birth certificate. This freedom has encouraged huge 
numbers of travelers to move freely and spontaneously, for both 
leisure and business, across our neighbor borders, without 
material extra cost.
    This freedom will disappear under a passport-based regime, 
especially if, as we fear, the demand for passports in the wake 
of a passport-based system well exceed the capacity for issuing 
them.
    In addition, the markets affected by the first phase of 
WHTI are in direct economic competition with markets that will 
be brought into the program later. By raising costs and time 
barriers to traveling to the Caribbean, for example, while 
postponing the impact on Mexico and Canada, the program will 
create an economic incentive favoring some destinations over 
others.
    Similarly, reducing the short-term impact of a new regime 
by exempting certain sectors of the travel industry from the 
requirements will create perverse effects on competition 
between sectors of the industry and must be avoided.
    Another side of the coin is that in the cruise market, many 
travelers have already made bookings for 2006. If the proposed 
phasing occurs, these travelers will incur unexpected and 
significant cost increases, in many cases exceeding 25 percent 
of the vacation cost. Many will cancel, a lose-lose outcome for 
everyone.
    The longer term, any way one looks at this, a new and 
imposing degree of formality, advance planning, and cost will 
be introduced for many people for whom cross-border travel for 
leisure and business has been an almost casual experience, 
particularly students and senior citizens.
    Unless costs can be lowered and efficiencies introduced, 
the certain result is a reduction in travel demand for cross-
border and nearby air/sea destinations.
    Therefore, Mr. Chairman, first and foremost, the 
Departments of Homeland Security and State should withdraw the 
announcement regarding WHTI insofar as it introduces or 
provides for a December 31, 2005, implementation.
    Second, we should seek development, in our view, of a 
single new travel instrument that accomplishes the security 
requirements of identification and entry/exit tracking, but 
does not provide for consular or other government services 
outside the United States, which we have been informed are the 
largest drivers of passport costs. There is still time, then, 
to find options that are not as expensive and are easier and 
faster to obtain than passports. We recommend exploration and 
testing by the Departments and consultation with the affected 
industries and the traveling public, an agenda directed at new 
approaches that will enhance security while minimizing 
disruptive impacts on the traveling public. ASTA would welcome 
the opportunity to participate in that process.
    Third, we should consider linking the WHTI to the evolution 
of the Registered Traveler program, so that as more travelers 
have the option to qualify in advance and achieve rapid border 
processing without the need for a passport, the problem becomes 
self-correcting.
    Fourth, consider adoption of commercially tested and proven 
methods of influencing consumer behavior by providing pricing 
incentives for early purchases, group purchases such as a 
family application for passports where they are all submitted 
together, student and senior discounts, to name a few.
    Finally, under no circumstances should any attempt be made 
to implement WHTI using passports as the core instrument less 
than 1 year after a final rule, whatever its content, is 
adopted.
    Thank you for considering our views, and we look forward to 
your questions.
    [The prepared statement of Mr. Ruden follows:]

Prepared Statement of Paul M. Ruden, Senior Vice President of Legal and 
Industry Affairs, American Society of Travel Agents, Inc., Alexandria, 
                                   VA

    The American Society of Travel Agents (``ASTA'') is pleased to 
provide the committee with its perspective on the Western Hemisphere 
Travel Initiative (``WHTI''), announced April 5 of this year by the 
Departments of State and Homeland Security.\1\ For the presentation of 
this testimony, we have consulted with the American Bus Association 
(ABA), the Interactive Travel Services Association (ITSA), the 
International Council of Cruise Lines (ICCL), the National Tour 
Association (NTA), the Student Youth Travel Association (SYTA) and the 
Travel Industry Association of America (TIA). This testimony will share 
some of their concerns along with our own. Some of them will likely 
file separate statements for the record.\2\
---------------------------------------------------------------------------
    \1\ ASTA was established in 1931 and is today the leading 
professional travel trade organization in the world. ASTA's corporate 
purposes specifically include promoting and representing the views and 
interests of travel agents to all levels of government and industry, 
promoting professional and ethical conduct in the travel agency 
industry worldwide, and promoting consumer protection for the traveling 
public. ASTA has provided testimony to numerous legislative committees 
and fact finding bodies. ASTA is widely recognized as responsibly 
representing the interests of its members, the travel agency industry, 
and consumers of travel services.
    \2\ We have attached to this testimony copies of previously issued 
position papers from ICCL and SYTA.
---------------------------------------------------------------------------
    We first want to make absolutely clear that the retail travel 
industry, and our related industries, concur fully with the need for 
improved security at all U.S. borders and other points of entry. We 
applaud the commitment of the State Department and the Department of 
Homeland Security to accomplish this difficult but vital goal. Our 
observation of the US-VISIT program suggests it is a true success 
story, in large part because of the measured and open consultative 
outreach through which it has been developed and implemented. 
Sustaining consumer confidence to travel freely in a post-September 11 
world is critical to the survival and growth of our industry, the 
travel suppliers whose services we sell, and the national economy whose 
vitality depends upon a thriving travel and transportation industry.
    At the same time, it is important that the Government have regard 
for the effects that enhanced security measures may have on the 
willingness of people to travel domestically and overseas. We will gain 
little to achieve absolute security and find fewer and fewer travelers 
willing to run the gauntlet to take a trip. Leisure travelers have 
choices of how to vacation, including the option to simply stay home, 
with disastrous consequences for our industry and the economy. Business 
travelers may have fewer options about whether to travel, but modern 
technology is providing new choices for them as well.
    The goal should be a tourism policy that allows U.S. citizens to 
travel abroad and foreign citizens to visit our country, free of 
unreasonable restrictions and preconditions that deter law abiding 
people from traveling. A careful balancing between security and tourism 
concerns should be a key part of that policy.
    We respectfully submit that the WHTI, as proposed, fails to strike 
that balance. As proposed, the WHTI will dramatically complicate the 
plans of American travelers and those traveling to the United States 
from countries in the Western Hemisphere. As a result, it will have a 
devastating impact on the businesses and millions of jobs that depend 
upon the travel and tourism industry.
    As further predicate, we understand that the initial program 
announcement, at least nominally, contemplates the possibility of a 
substitute for passports, an ``other secure, accepted document,'' but, 
as noted earlier, none of the listed options is a real substitute for 
the typical leisure or business traveler. Moreover, the announcement 
clearly states that ``the passport (U.S. or foreign) will be the 
document of choice.''
    No other instrument that is low in cost and relatively easy to 
obtain has been identified. The original announcement of the program 
said that ``additional documents are also being examined to determine 
their acceptability for travel. The public will be notified of 
additional travel document options as those determinations are made.'' 
Without information about the nature of the documents being considered 
and the likely timetable for their disclosure and possible 
implementation, the possibility of their development is too little and 
too late when we are facing a December 31, 2005, initial implementation 
date. While Federal law is trying to induce improvements in the 
processes used to issue state drivers' licenses, it appears that the 
Government does not plan to include any driver's license, regardless of 
the circumstances of its issue, as a possible substitute for a 
passport. It therefore seems highly likely that the passport is going 
to be the instrument through which the WHTI is implemented.
    That brings us to the core problems with the program as announced.
    First, there is simply insufficient time to permit the first phase 
of a new document program to be developed and implemented before the 
first announced effective date of December 31, 2005. While we commend 
the sensitivity to business and other travel concerns underlying the 
phasing concept of the Departments of Homeland Security and State, we 
are extremely concerned that any attempt to proceed on the announced 
timetable will have severely disruptive effects on travel.
    Although the advance notice of proposed rulemaking (ANPRM) 
described by the two Departments in their April announcement of this 
program and, presumably, the notice of proposed rulemaking to follow, 
will provide an opportunity for public and industry comments, the ANPRM 
has not been released. Insufficient time remains before the initial 
deadline for the Departments to thoroughly consider the expected large 
mass of comments, conduct necessary followup discussions and 
evaluations, extensively publicize the new requirements, whatever they 
ultimately are, and permit appropriate adjustments by travelers and the 
businesses that serve them. The first deadline is now barely 6 months 
away and the administrative regulatory process has not begun in a 
meaningful way.
    Even if, contrary to experience, the required input processes can 
be completed swiftly, there will be insufficient time to fully educate 
the public about the new regime and secure widespread compliance. The 
Government will likely look to the travel industry to assist in the 
consumer awareness effort and many members of our industry will want to 
help. However, many private firms will be handicapped in their efforts 
to participate in public awareness campaigns regarding the new regime, 
because none could have anticipated the December 31, 2005, initial 
deadline and, therefore, will have no budgeted funds available for that 
purpose.
    Given these obstacles, there is no compelling case for rushing to a 
new system. It is not legally required, as there is no mention, let 
alone a requirement, in the statute that the implementation be phased 
or that it be started as early as the end of 2005. The statutory 
deadline for implementation of that plan is January 1, 2008. Nor has 
any security crisis involving American travelers seeking to reenter the 
country been identified. Yet the primary focus of the new document plan 
is precisely those persons.
    So, to be clear, the first major problem is not with the phasing 
concept as such, but lies in the attempt to start the phasing at the 
end of this year.
    A second, and closely related, issue is that requiring passports, 
or travel cards that require a passport to obtain one, will create a 
major new obstacle to millions of people who are otherwise ready to 
travel, including particularly the growing numbers of those who make 
their travel plans close to departure. There are several components to 
this problem.
    One is that passports are expensive to obtain and require 
significant advance planning. Publicizing the requirement and having 
the traveling public absorb it, and then comply with it, will 
necessitate substantial lead time and effort. Alternatives that 
themselves require a passport to obtain only complicate the situation--
they are not an improvement from the standpoint of cost or advance 
planning. The options mentioned in the program announcements are not 
solutions for most travelers most of the time.
    The Secure Electronic Network for Travelers Rapid Inspection 
(SENTRI) is more expensive and complex than passport requirements and 
even a casual examination of its rules and limitations will make clear 
that it is not a meaningful option for many Americans in WHTI.\3\ The 
United States-Canada NEXUS Air Program is a pilot program of limited 
duration. Its $50 fee is an annual cost to the traveler. The highway 
version of NEXUS requires the applicant to appear at one of five 
offices located in places such as Blaine, Washington; Detroit, 
Michigan; Port Huron, Michigan; and Champlain, New York.\4\ NEXUS is 
not going to work for most U.S. citizens. The Free and Secure Trade, or 
FAST, program is for shippers \5\ and the Border Crossing Card is for 
Mexican citizens only.\6\
---------------------------------------------------------------------------
    \3\ http//www.cbp.gov/xp/cgov/travel/frequent_traveler/sentri.xml.
    \4\ http://www.cbsa-asfc.gc.ca/travel/nexus/faq-e.html#12.
    \5\ http://www.cbsa-asfc.gc.ca/import/fast/menu-e.html#what.
    \6\ http://travel.state.gov/visa/temp/types/types_1266.html.
---------------------------------------------------------------------------
    Another element of the obstacle is the reality that many student 
travelers and senior citizens, especially, though not exclusively, in 
border States, do not have passports. In the past these travelers have 
had the freedom to travel to Canada, Mexico, and the Caribbean without 
a passport, relying instead on documents they already possessed, such 
as a driver's license or birth certificate. This freedom has encouraged 
the making of close-to-departure decisions to travel across the 
borders. Huge numbers of travelers have been able to move freely and 
spontaneously, for both leisure and business, across our neighbor 
borders, without material extra cost. This freedom will disappear under 
a passport-based regime.
    Yet another dimension of the advance planning impact is the 
question whether, in the time available, the Department of State can 
gear up sufficiently to handle a vast increase in passport applications 
in the normal course, without forcing many travelers to incur still 
higher costs for passport expediting services. While we have heard, 
anecdotally, that passport applications have increased in recent weeks, 
we have seen nothing that measures that increase against the total need 
if the new rules are made effective with the year-end 2005 deadline in 
place. Since the vast majority of Americans do not have passports now 
and since the markets affected by the WHTI are traveled predominantly 
by persons without passports, we anticipate the demand for passports in 
the wake of a rule requiring them may well exceed the processing 
capacity of the State Department.
    A third aspect of the phasing problem is the diplomatic controversy 
that it will likely create. The markets affected by the first phase of 
WHTI are in direct economic competition with markets that will be 
brought into the program later. By raising the barriers, in terms of 
cost and time, to traveling to the Caribbean, while postponing the 
impact on Mexico and Canada, the Government will create an economic 
incentive for travelers to favor the latter regions over the Caribbean 
as a destination.
    New passports cost close to $100 for an adult, and the total out-
of-pocket procurement cost exceeds that amount when passport photos are 
included. While the total cost of a new passport in the range of $125 
may not seem like much money, it must be remembered that in the travel 
industry price differentials of less than 10 percent of that amount are 
seen as critical to consumer choices among travel suppliers and between 
travel packages. Differences of $125 per person would, therefore, 
certainly and significantly, affect destination choices, especially 
when the cost is multiplied for a family traveling together.
    These concerns are supported by a study conducted by the World 
Travel & Tourism Council of the potential impact of the December 31, 
2005, passport requirement on Caribbean markets. The WTTC analysis 
found that nine Caribbean destinations will be seriously impacted. 
According to the study, nonpassport U.S. visitors to some countries, 
such as Jamaica, account for 80 percent of total U.S. visitors. Other 
islands have somewhat lower, but still very large, shares of 
nonpassport U.S. visitors in the range of 15 to 30 percent.
    These realities are a compelling reason why it is not feasible to 
reduce the impact of a new passport regime by exempting certain sectors 
of the travel industry from the requirements. To do so would have 
perverse effects on the competition between sectors of the industry, in 
addition to the market discrimination described earlier.
    Yet another element of the phasing issues is that some travelers 
have already made vacation and other travel bookings for 2006. This is 
particularly true for the cruise market where, unlike some of the 
transborder land-based markets, substantial advance booking is common. 
If the proposed phasing occurs, these travelers will incur completely 
unexpected and significant cost increases. Since the cost of many tours 
and cruises to nearby destinations in Mexico and the Carribean sell for 
as little as $400, the per-person price increase from WHTI, as 
proposed, will exceed 25 percent of the vacation cost. Many will cancel 
because of the increase, a lose-lose outcome for everyone.
    The longer term consequences of a passport-based regime are also 
troubling. We are informed that about 80 percent of motor coach 
passengers are students and senior citizens. Canada is the number one 
market for motor coach travel. Senior citizens also comprise more than 
60 percent of the group tour business. While no hard data appears to 
exist, industry experience suggests that these groups are a large part 
of the estimated 75 to 80 percent of Americans who do not currently 
possess a passport.
    Any way one looks at this, the result is that the cost of 
international travel by U.S. citizens is going to rise significantly 
under the new document regime. And new advance planning restraints are 
going to be imposed on a large market of students and senior citizens, 
whose ability to travel on short notice will, therefore, be impaired. 
For many people for whom cross-border travel for leisure and business 
has been almost a casual experience, a new and imposing degree of 
formality will be introduced. Unless costs can be lowered and 
efficiencies introduced, the almost certain result is a reduction in 
travel demand for cross-border and nearby air/sea destinations.
    Congress has wisely chosen to permit enough lead time that direct 
consultations with industry groups can be held that could lead to new 
approaches that will enhance security while minimizing any intrusive 
and disruptive impact on the traveling public. Options that are not as 
expensive, and easier and faster to obtain than passports, should be 
devised, explored, and tested by the Departments in conjunction with 
the affected industries and the traveling and touring public. In that 
regard, we urge senior representatives from the Department of State and 
Department of Homeland Security to convene discussions with executives 
and other experts from these affected industries, sitting together, at 
the earliest possible time. ASTA would welcome the opportunity to 
participate in such discussions. The goal would be to determine how 
security can be enhanced at our borders without unreasonably 
undermining a key segment of the economy.
    The announcement of the initial December 31, 2005, implementation 
date has spawned a number of suggestions for modification of the 
timeline, as well as changes in the passport regime. We believe that, 
at least, the following are worth further consideration and ask the 
subcommittee to use its good offices to urge the Departments of 
Homeland Security and State to take these up.
    First and foremost, the Departments of Homeland Security and State 
should withdraw the announcement regarding WHTI insofar as it provides 
for a December 31, 2005, implementation.
    Second, in connection with the multisegment discussions referred to 
earlier, consideration should be given to development of a single new 
travel instrument that accomplishes the security requirements of 
identification and entry-exit tracking, but does not provide for 
consular or other government services outside the United States that we 
have been told are the largest drivers of passport costs.
    Third, consider linking WHTI to the evolution of the Registered 
Traveler program, so that more travelers would have the option to 
qualify in advance, achieve assured rapid processing at points of exit 
and entry without the need for a passport.
    Fourth, consider adoption of commercially tested and proven methods 
of influencing travel document consumer behavior by providing pricing 
incentives for early purchases, group purchases (family applications 
submitted together), student and senior discounts, to name a few.
    Fifth, under no circumstances should an attempt be made to 
implement WHTI using passports as the core document less than 1 year 
after a final rule is adopted.
    Thank you for considering our views and we look forward to your 
questions.
                                 ______
                                 

    Western Hemisphere Travel Initative (WHTI)--ICCL Position Paper

    The International Council of Cruise Lines (ICCL) hereby has taken 
the following position regarding the above captioned matter on behalf 
of its members. ICCL is a nonprofit trade association, whose membership 
comprises over 90 percent of the North American cruise industry, 
representing the vast majority of the berth capacity for passengers 
embarking from U.S. ports.\1\ Since 1968, ICCL and its predecessor 
organization have represented the interests of the cruise industry 
before domestic and international regulatory bodies.
---------------------------------------------------------------------------
    \1\ ICCL member lines include: Carnival Cruise Lines, Celebrity 
Cruises, Costa Cruise Lines, Crystal Cruises, Cunard Ltd., Disney 
Cruise Line, Holland America Line, NCL America, Norwegian Cruise Line, 
Orient Lines, Princess Cruises, Radisson Seven Seas Cruises, Royal 
Caribbean International Ltd., Seabourn Cruise Line, Silversea Cruises, 
and Windstar Cruises.
---------------------------------------------------------------------------
    The ICCL clearly understands that the U.S. Government has a 
legitimate need to enhance the security at the borders, and requiring 
passports (or other appropriate documents) is an essential step in that 
effort. In general, the cruise industry believes that a standardized 
document simplifies the process of border crossing and adds to 
security.
    However, the membership of the ICCL has serious concerns with 
several aspects of the proposed rule, which, for ease of discussion, 
are outlined and reviewed issue by issue.

                           PROPOSED PHASE-IN

    Although ICCL was aware of the January 1, 2008, implementation date 
required in the Intelligence Reform bill, we were not consulted in 
advance regarding the announced phase-in schedule for the passport 
requirements and believe the December 2005 phased-in announced date for 
the Caribbean is very problematic.
    The State Department proposes that the phase-in approach gives 
sufficient notice to industry and travelers. In reality, this is not 
sufficient time, and the proposed phase-in approach unfairly affects 
travel to Bermuda, Caribbean, and Central and South America as compared 
to Mexico and Canada. The fact is, the decision to take a cruise is 
often determined by a traveler many months in advance. Travel agents 
are currently booking cruises to the Caribbean region for the 2006 
season. Since the proposed rule has not yet been published, the final 
rule is unlikely to be finalized until winter 2005. That schedule will 
not allow sufficient time for cruise passengers to get a passport nor 
will it allow the industry to promote the new requirements. How will 
those passengers already booked on cruises to the Caribbean be treated? 
After a reservation is made, travel agents have little opportunity to 
interact with passengers until they show up for their vacation at the 
port.

           ADVERSE DISCRIMINATION OF TRAVEL TO THE CARIBBEAN

    From the fall of 2005 until January 1, 2007, if a U.S. citizen is 
thinking of booking a vacation crossing international borders to the 
Western Hemisphere and they do not yet have a passport, they will 
likely choose Mexico or Canada over anywhere else because of the extra 
cost ($97) and time of obtaining a passport. If they are a last minute 
traveler without a passport, there will be no other option but Mexico 
or Canada. The December 31, 2005, deadline clearly favors Mexico and 
Canada over other regions in the Western Hemisphere.
    The cruise industry had over 10 million passengers in 2004; over 8 
million were North Americans. The Caribbean is the most heavily visited 
cruise destination accounting for approximately 45.1 percent of all 
cruise line placements. In 2004 it is estimated that there were over 
3,578 cruise ships that visited the region with a total passenger 
potential of 6,380,021 visitors. Based on these numbers, it is easy to 
understand why the industry is concerned with the proposed December 
2005 deadline.

                             PASSPORT COSTS

    Passports currently cost $97. Initially, this could be cost 
prohibitive for a family of four or larger, who may decide to choose 
another vacation within the United States that will not require a 
passport. The State Department has estimated that 20 percent or less of 
all Americans have U.S. passports.

                     NEW U.S. PASSPORT REQUIREMENTS

    The State Department recently issued a new rule on biometric 
requirements for future U.S. passports, which are anticipated to be in 
effect by 2006. It seems counterproductive and less secure to require 
millions of Americans to obtain passports by the end of 2005 under the 
current passport parameters. The State Department will be proposing a 
new electronic passport which is supposed to enhance security. Would it 
not be better to have travelers wait until next year and get the new 
version than to purchase a less secure passport this year?

                         PROPOSALS/SUGGESTIONS

    Implementation of all phases of the proposed passport program 
should be delayed until January 2008. The proposed regulations 
discriminate against travelers to the Caribbean and air/sea travelers 
with the 2006/07 activation date.
    Delaying the action date will give much-needed time for the Federal 
Government, the travel industry and, most importantly, the traveling 
public, to adapt to the new passport program.
    Create a separate (shorter) queue for those Western Hemisphere 
travelers who are in possession of a passport and widely publicizing 
this benefit.
    To conclude, ICCL does not believe there is any basis for treating 
travelers to the Caribbean, Bermuda, and Central and South America any 
differently from travelers to Mexico or Canada, and would suggest that 
any implementation deadlines be revised to treat both regions the same. 
ICCL will be working closely with other travel industry associations 
and will be submitting comments regarding these and other concerns to 
the State Department once the proposed rule is published.
                                 ______
                                 

             Proposed Western Hemisphere Travel Initiative

             (By the Student and Youth Travel Association)

                                OVERVIEW

    On April 5, 2005, the U.S. Departments of State (DOS) and Homeland 
Security (DHS) issued an Advance Notice of Proposed Rulemaking (ANPRM) 
regarding the proposed Western Hemisphere Travel Initiative requiring 
all United States citizens, Canadian citizens, citizens of the British 
Overseas Territory of Bermuda and citizens of Mexico to have a passport 
or other secure document to enter or reenter the United States by 
January 1, 2008. Security and safety is, and always has been, of utmost 
importance to travelers and the travel industry, especially for senior 
citizens and young travelers. Cross-border travel provides cultural and 
educational experiences that promote lifelong learning and peace 
through tourism. However, cross-border tourism for students, youth, and 
senior citizens, especially those traveling in groups, will be 
adversely affected by this initiative with negligible improvement to 
security or safety.

                               BACKGROUND

    1. On December 17, 2004, the Intelligence Reform and Terrorism 
Prevention Act of 2004 (IRTPA, also known as the 9/11 Intelligence 
Bill) was signed into law mandating that the DHS, in consultation with 
the DOS, develop and implement a plan to require U.S. citizens and 
foreign nationals to present a passport, or other secure document when 
entering the United States by January 1, 2008.
    2. On April 5, 2005, the DOS and DHS issued the ANPRM announcing 
the proposed Western Hemisphere Travel Initiative that moved up the 
timeline for implementation as follows:

   December 31, 2005--Passport or other accepted document 
        required for all travel (air/sea) to or from the Caribbean, 
        Bermuda, Central and South America.
   December 31, 2006--Passport or other accepted document 
        required for all air and sea travel to or from Mexico and 
        Canada.
   December 31, 2007--Passport or other accepted document 
        required for all air, sea and land border crossings.

    3. Canada and Mexico are the number one and two destinations for 
U.S. citizens traveling outside the United States. Often the first out-
of-country travel experience for U.S. citizens, especially for students 
and youth, is either Canada or Mexico.
    4. Age 16 and older: The passport fee is $55. The security 
surcharge is $12. The execution fee is $30. The total fee is $97. 
Additionally, there are expenses for a photo, transportation, and 
overnight delivery service (DOS recommended for both submitting and 
receiving). The total actual cost is normally $150-$200 per passport.
    5. Under Age 16: The passport fee is $40. The security surcharge is 
$12. The execution fee is $30. The total fee is $82. Additionally, 
there are expenses for a photo, transportation, and overnight delivery 
service (DOS recommended for both submitting and receiving). The total 
actual cost is normally $145-$185 per passport.
    6. Fee to expedite passport is an additional $60.

                                 EFFECT

    1. Many senior citizens do not have passports. Since seniors 
comprise the largest market for group travel in the United States, the 
passport requirement will make it more difficult for them to visit our 
neighbors to the north and south.
    2. Most students and youth do not have passports. Student/youth 
travelers in North America will be negatively impacted. Student tours 
provide a way for young residents of North America to learn about their 
neighbors and this hemisphere's diverse culture and history. Placing an 
additional obstacle on student tours (for negligible security gain) 
creates barriers for cross-border educational/cultural programs and 
deprives them of experiences that will enhance their ability to compete 
globally.
    3. The cost of obtaining a passport adversely affects students, 
youth, families, and senior citizens.

   For student/youth groups it will add $100 or more to their 
        trip cost.
   A family of four would incur an extra expense of over $600 
        to travel to Mexico or Canada.
   The passport fee could make a cross-border trip unaffordable 
        to low-income youth and senior citizens on a fixed income.

    4. Youth who are at-risk, disadvantaged, and/or physically/mentally 
challenged, may be especially impacted by the proposed passport 
initiative.
    5. At a time when the U.S. Educational System is promoting no child 
left behind, the number of students who are unable to participate with 
their classmates in school-based student tours to our neighboring 
countries will increase.
    6. Tour operators specializing in cross-border group travel will be 
negatively impacted.
    7. A decrease in cross-border tourism will adversely affect those 
employed in the tourism industry, thus, also having a negative economic 
impact.

                            RECOMMENDATIONS

    1. Implementation of all phases of the proposed passport program 
should be delayed until January 2008. The proposed regulations 
discriminate against travelers to the Caribbean and air travelers with 
the 2006/07 activation date. Delaying the action date will give much 
needed time for the Federal Government, the travel industry and, most 
importantly, the traveling public, to adapt to the new passport 
program.
    2. Lower the total cost of a passport for under age 16 and senior 
citizens to no more than $50.
    3. Allow student/youth travelers, traveling with an adult who has 
appropriate secure travel documents, to use photo identification and 
proof of citizenship (i.e. birth certificate) as secure documents to 
satisfy U.S. entrance acceptance.
    4. Find ways to increase application efficiency and reduce the time 
it takes to obtain a passport for applicants with appropriate 
documentation.

    Senator Coleman. Thank you very, very much, Mr. Ruden.
    Mr. Pastor.

     STATEMENT OF DR. ROBERT A. PASTOR, VICE PRESIDENT OF 
INTERNATIONAL AFFAIRS, PROFESSOR AND DIRECTOR OF THE CENTER FOR 
  NORTH AMERICAN STUDIES, AMERICAN UNIVERSITY, WASHINGTON, DC

    Dr. Pastor. Thank you, Senator Coleman. It is good to see 
you, Senator Dodd.
    I appreciate the invitation to speak before your committee 
and to place, as you requested, the issue on your agenda in a 
broader context.
    As you know, I have been one of the cochairs of a task 
force on the future of North America sponsored by the Council 
on Foreign Relations. The title of the report is called, 
``Building a North American Community.''
    We included 31 people from all of the parties in all three 
countries. We proposed a blueprint with very specific 
recommendations on where we should go from here.
    I would say that the discussion at this hearing is 
symptomatic of the problem that we face and it diverts us from 
the solution.
    By focusing on passports at the two borders, we are 
thinking too small about a problem that has grown phenomenally 
as a result of two pivotal events in the last decade, NAFTA and 
9/11.
    By thinking small, we are drawn into tradeoffs that are 
actual traps. For every step that we take to secure ourselves, 
we pay a higher price in terms of harassment of travel and in 
terms of the costs of our goods transiting the border.
    As a result of NAFTA, our country has become much more 
dependent on our two neighbors for our prosperity and as a 
result of 9/11, our country has become much more dependent on 
our two neighbors for its security.
    Only by framing the issue before you today in its broadest 
context will we succeed in transcending this tradeoff between 
prosperity and security. Let me, therefore, very briefly 
summarize the four main points in my statement to you.
    First, in the United States, we take our two neighbors for 
granted, but since NAFTA, North America has become the largest 
free-trade area in the world, larger than that of the European 
Union.
    While Mexico and Canada are more dependent on the United 
States since NAFTA, we have not adequately recognized how much 
more dependent we have become on our two neighbors.
    We export more each year to Canada and Mexico by--we export 
almost twice as much more to Canada and Mexico each year as we 
do to the 25 nations of the European Union and almost 4 times 
more than what we export to China and Japan.
    Our two largest sources of energy are not in the Middle 
East or in South America. They are Canada and Mexico.
    The largest source of legal and illegal migration is our 
Mexican neighbor to the south.
    Our two borders are crossed each year more than 400 million 
times.
    Second, the agenda that we face has changed since NAFTA, 
but we have not kept policy apace to the economic and social 
integration of those changes.
    The new agenda requires us to address challenges like the 
development gap between Mexico and the United States, 
transportation and infrastructure, immigration, education, 
energy, institution building, security, and a different way of 
thinking about our two neighbors than we have in the past.
    NAFTA was not designed to address any of those issues. It 
was designed simply to dismantle trade and investment barriers. 
It succeeded in doing that. It is our job now to focus on the 
second decade agenda.
    Third, the summit of March 23 succeeded in being more than 
just a photo op, which was what charactered the previous 
summits of the three leaders. But the truth is that it did not 
adequately address this full agenda that we discussed, and I am 
not optimistic that the reports that have been requested from 
the Ministers in all three countries are going to take us very 
far down this road.
    I think there are many reasons why that is the case. And I 
would hope that your committee pursues the report that comes 
out on June 23. But in our Council on Foreign Relations task 
force, we decided to take a broader vision than what the three 
executive branches have done.
    And we have identified not only a vision that says that our 
prosperity succeeds and is enhanced to the extent that the 
prosperity of all three countries are improved, but is 
diminished to the extent that we do not address each country's 
problems.
    We recommend a North American security perimeter, a common 
external tariff, a North America investment fund, which has 
been proposed also by Senator John Cornyn, new institutions 
like the North American Advisory Council, a North American 
interparliamentary committee that would join your United 
States/Mexico and United States/Canadian interparliamentary 
committee, a North America commission on competition, or on 
antitrust, centers for North American studies to be supported 
like the European Union supports its EU Centers in this 
country, additional scholarships for our students to travel in 
all directions.
    As vice president of international affairs at American 
University, my job is to encourage our students to travel 
abroad and to encourage international students to come to 
American University. And they are going. Our students are going 
at twice the rate they have gone 3 years ago.
    But students from Canada and Mexico are much fewer than 
ever before. And it is not easy to get our students to want to 
go to Mexico and Canada. These problems should be addressed.
    Let me address, specifically, the challenge before this 
committee, today, by referring to the problem of how do we 
define a security perimeter, that the best way to secure the 
United States, today, is not at our two borders with Mexico and 
Canada, but at the borders of North America as a whole, and to 
recognize that each of the three governments have to feel a 
stake in addressing the terrorist challenge.
    And the question is what should they do? I think what we 
need is, first, a common exclusion list, better intelligence 
sharing among the three countries than we have had up until 
now, combined training by immigration and customs, and security 
personnel that work the borders between the two countries and 
the security perimeter, exchange of personnel that bring 
Canadians and Mexicans into the Department of Homeland Security 
as individuals and with their perspective that would enlarge 
our own vision of our own security.
    A common external tariff would relieve the pressure on the 
borders by allowing our inspectors to stop focusing on goods 
transiting and eliminate rules of origin, but concentrate their 
limited time on security and terrorist matters.
    A North American border pass that would combine and unify 
the existing SENTRI, NEXUS, BCC, and FAST into one single 
biometric North American border pass or passport, if you will, 
that would be secure and that would invite people to apply for 
that under a common system among our three countries.
    These are some of the specific ways that we could address 
this issue without having to consider, but just introducing a 
passport for people that are reentering and that would, at the 
same time, guarantee our security overall.
    In conclusion, if you look closely at public opinion polls 
as I have done in all three countries, and in particular, a 
poll that was done in 2003, you will see that a majority of the 
people in all three countries actually believe that we will 
have an economic union in North America in 10 years.
    Despite the fact that we are taking few steps in that 
direction, the majority believe that we would be better off if 
we had a more integrated policy on a range of economic issues; 
security, transportation, and even defense-related issues.
    And a majority that believe that we would benefit by a 
North American security perimeter.
    Too often we focus on our differences between the 
countries. I think it is time now to take the debate within 
this country to a new level and to think about ourselves as 
part of a larger North America and to define what we mean by a 
true North American community.
    This may not seem urgent at this moment, but it is in our 
long-term interest. And the longer we put off the harder 
questions about how do we relate to our neighbors, the more we 
will pay the price of that. Our security and prosperity depend 
on our ability to define what we mean by a North American 
community.
    Thank you, sir.
    [The prepared statement of Dr. Pastor follows:]

     Prepared Statement of Dr. Robert A. Pastor, Vice President of 
   International Affairs, Professor of International Relations, and 
Director of the Center for North American Studies, American University, 
                             Washington, DC

    Chairmen Lugar and Coleman and members of the committee, I 
appreciate the invitation to testify before your committee. You asked 
me to place the issue of the Western Hemisphere Travel Initiative 
within the context of North American cooperation and border control and 
to relate it to the recent report by an Independent Task Force on the 
Future of North America sponsored by the Council on Foreign Relations 
in New York. The Chairs and Vice Chairs of the three nation, 31-person 
Task Force were John F. Manley and Tom d'Aquino of Canada, Pedro Aspe 
and Andres Rozental of Mexico, and William F. Weld and I from the 
United States. Entitled ``Building a North American Community,'' the 
report offered a blueprint of the goals that the three countries of 
North America should pursue and the steps needed to achieve those 
goals.
    The focus today is on the new requirement for all citizens of the 
United States, Canada, Mexico, and Bermuda to have a passport to travel 
among our countries. It is intended to secure the homeland, but I 
question whether this approach will achieve the goal, and I fear that 
it will harm other U.S. interests and divert us from more effective 
paths toward securing our continent.
    As we approach the fourth anniversary of 9/11, it is time for us to 
step back from our trauma and the border and examine the problem in a 
broader context. The best way to assure security is not at our borders 
with Canada and Mexico and not by defining ``security'' in conventional 
and narrow terms. We need to think about these issues in the context of 
a continent that is integrating economically and socially at a rapid 
rate. The problem is that the three governments have failed to 
understand this phenomenal transformation. Policy has not kept pace 
with the market, and our security is endangered as much by the limits 
of our vision as by the terrorists who threaten us.
    Defensive about Europe's example, we have failed to learn from 
their experience and succumbed to the opposite mistake. Whereas Europe 
built too many intrusive, supra-national institutions, we have 
practically no credible institutions. Instead of trying to fashion a 
North American approach to continental problems, we continue to pursue 
problems on a dual-bilateral basis, taking one issue at a time. But 
incremental steps will no longer solve the security problem, or allow 
us to grasp economic opportunities. What we need to do now is forge a 
North American Community, based on the premise that each member 
benefits from its neighbor's success and is diminished by its problems.
    The subject of this hearing today--whether passports should be 
required to cross our two borders--is symptomatic of the problem. We 
are thinking too small. We need to find ways to making trade and travel 
easier while we define and defend a continental security perimeter. 
Instead of stopping North Americans on the borders, we ought to provide 
them with a secure, biometric Border Pass that would ease transit 
across the border like an E-Z pass permits our cars to speed through 
toll booths.
    In my statement, I will comment first on the emergence of North 
America, the next decade's agenda, and the response by the three 
governments. Next, I will describe some of the recommendations of the 
Council Task Force Report and focus on the travel initiative and the 
security and border issues.
    As a word of introduction, I have been working on issues related to 
North America for nearly 30 years--in the government, in a 
nongovernmental organization (the Carter Center) monitoring elections 
in Mexico, the United States, and Canada, and as a teacher and writer 
of five books and many articles on the subject of North America. 
Because I believe deeply that our security and prosperity depend on 
forging a new relationship with our neighbors, in September 2002, I 
established, and now direct, a Center for North American Studies at 
American University.

                     THE EMERGENCE OF NORTH AMERICA

    On January 1, 1994, the North American Free Trade Agreement (NAFTA) 
came into effect. If one judges a free-trade area by the size of its 
product and territory, North America became the largest in the world, 
larger than the European Union (EU). Yet that fact escaped all but a 
few analysts. It is widely known that the United States has the world's 
largest economy, but North America also includes the eighth (Canada) 
and ninth (Mexico) largest economies as well. (The Economist, 2004)
    In the 11 years since NAFTA came into effect, U.S. trade (exports 
and imports) more than doubled with its two neighbors--from $293 
billion in 1993 to $713 billion in 2004. Annual flows of U.S. direct 
investment to Mexico went from $1.3 billion in 1992 to $15 billion in 
2001, and the stock, from $14 billion to $57 billion. The annual flows 
of U.S. investment in Canada increased eight-fold, and the stock of FDI 
increased from $69 billion in 1993 to $153 billion in 2002. Canadian 
investment flows to the United States grew from a stock of $40 billion 
in 1993 to $102 billion in 2001.
    Travel and immigration among the three countries also increased 
dramatically. In 2004, people crossed the two borders about 400 million 
times. The most profound impact came from those people who crossed and 
stayed. The 2000 census estimated that there were 21 million people of 
Mexican origin in the United States. Nearly two-thirds of all Mexican-
born immigrants arrived in the last two decades.
    North America is larger than Europe in population and territory, 
and its gross product not only eclipses that of the EU but also 
represents one-third of the world's economic output. Intraregional 
exports as a percentage of total exports climbed from around 30 percent 
in 1982 to 58 percent in 2002 (compared to 61 percent for the EU). Our 
two neighbors export more energy to us than any other country, and U.S. 
exports to them were nearly twice those to all of Europe and nearly 
four times those to Japan and China in 2004. North America is no longer 
just a geogaphical expression. It has become a formidable and 
integrated region.

              NORTH AMERICA'S NEW AGENDA AND THE RESPONSE

    With a few notable exceptions--such as trucking, softwood lumber, 
and sugar--where U.S. economic interests have prevented compliance, 
NAFTA largely succeeded in what it was intended to do: Barriers were 
eliminated, and trade and investment soared. A decade later, however, 
North America faces new challenges that require new policies.

   First, NAFTA was silent on the development gap between 
        Mexico and its two northern neighbors, and that gap has 
        widened.
   Second, NAFTA did not plan for its own success: It failed to 
        invest in new roads and infrastructure to cope with more trade 
        and traffic. The resulting delays raised the transaction costs 
        of regional trade more than the elimination of tariffs lowered 
        them.
   Third, NAFTA did not address immigration, and the number of 
        undocumented workers in the United States jumped in the 1990s 
        from 3 million to 11 million (55 percent or 6 million came from 
        Mexico).
   Fourth, NAFTA did not address energy issues, a failure 
        highlighted by the catastrophic blackout that Canada and the 
        northeastern United States suffered in August 2003, and the 
        dramatic growth in imports of natural gas by Mexico from the 
        United States.
   Fifth, NAFTA created few credible institutions to coordinate 
        policy, leaving the region vulnerable to market catastrophes 
        like the Mexican peso crisis.
   Finally, NAFTA did nothing to address security, and as a 
        result, the long-term effects of September 11 threaten to 
        cripple North American integration.

    This is the agenda for North America in the next decade. On March 
23, 2005, President George Bush, President Vicente Fox, and Prime 
Minister Paul Martin met in Texas. This was not their first meeting, 
but the others had been little more than photo opportunities. The three 
leaders announced a ``Security and Prosperity Partnership of North 
America,'' based on the premise that both security and prosperity are 
``mutually dependent and complementary.'' They declared that the 
partnership is ``trilateral in concept,'' but the framework was 
incremental and dual-bilateral in fact.
    Instead of addressing chronic problems like softwood lumber or 
sugar, the three leaders tasked their Ministers to chair working groups 
with ``stakeholders'' and produce a report in 90 days--by June 23--with 
concrete steps to achieve measurable goals. The first question, of 
course, is why these security and competitiveness goals have not 
already been implemented since most of them have been declared often, 
and the security goals are, by and large, a part of the ``smart 
borders'' agreement. The answer is that our governments are not 
organized to address these questions on a trilateral basis, and so it 
should come as little surprise if the results are meager.
    More importantly, compared to the agenda above, these steps are 
quite timid. The truth is that traffic has slowed at the border because 
of additional inspections, but it is not at all clear that the borders 
are more secure today than they were 4 years ago. The flow of 
unauthorized migrants is as high or higher. The Communique lacks a 
clear uplifting goal like a customs union. One cannot eliminate 
``rules-of-origin'' provisions without a common external tariff, which 
the WTO equates with a ``customs union.'' Most important, there is no 
allusion to the paramount challenge of North America--the development 
gap that separates Mexico from its northern neighbors and, therefore, 
there is no proposal for dealing with that. There are no plans for 
dealing with education, energy, transportation, or establishing 
institutions that could prepare North American options or monitor 
progress. To move this agenda requires an organizing vision and 
political will.
    There was a moment early in the Fox and Bush administrations when 
North American leaders appeared to grasp the essence of such a vision. 
In February 2001, Fox and Bush jointly endorsed the Guanajuato 
Proposal, which read, ``After consultation with our Canadian partners, 
we will strive to consolidate a North American economic community whose 
benefits reach the lesser-developed areas of the region and extend to 
the most vulnerable social groups in our countries.'' Unfortunately, 
they never translated that sentiment into policy (with the exception of 
the symbolic but substantively trivial $40 million Partnership for 
Prosperity).
    All three governments share the blame for this failure. President 
Bush's primary goal seemed at first to open the Mexican oil sector to 
United States investors, while then-Canadian Prime Minister Chretien 
showed no interest in working with Mexico. President Fox, for his part, 
put forth too ambitious an agenda with too much emphasis on radical 
reform of U.S. immigration policy. Bush's initial response was polite, 
but he soon realized he could not deliver and postponed consideration. 
The illegal immigration issue remains thorny and unsolved. Ultimately, 
however, it is more symptom than cause: The way to reduce illegal 
immigration is to make Mexico's economy grow faster than that of the 
United States.
    The Council on Foreign Relations Task Force Report spells out such 
a vision. (http:// www.cfr.org/pub8102/independent_task_force_report/
building_a_north_
american_community.php) Let me summarize and amplify some of its 
recommendations.
    NAFTA has failed to create a partnership because North American 
governments have not changed the way they deal with one another. Dual 
bilateralism, driven by U.S. power, continue to govern and irritate. 
Adding a third party to bilateral disputes vastly increases the chance 
that rules, not power, will resolve problems.
    This trilateral approach should be institutionalized in a new North 
American Advisory Council. Unlike the sprawling and intrusive European 
Commission, the Commission or Council should be lean, independent, and 
advisory, composed of 15 distinguished individuals, 5 from each nation. 
Its principal purpose should be to prepare a North American agenda for 
leaders to consider at biannual summits and to monitor the 
implementation of the resulting agreements. It should be an advisor to 
the three leaders but also a public voice and symbol of North America, 
It should evaluate ways to facilitate economic integration, producing 
specific proposals on continental issues such as harmonizing 
environmental and labor standards and forging a competition policy.
    The United States Congress should also merge the United States-
Mexican and United States-Canadian interparliamentary groups into a 
single ``North American Parliamentary Group.'' A third institution 
should be a ``Permanent Tribunal on Trade and Investment.'' NAFTA 
established ad hoc dispute panels, but it has become difficult to find 
experts who do not have a conflict of interest to arbitrate conflicts. 
A permanent court would permit the accumulation of precedent and lay 
the groundwork for North American business law.
    Canada and Mexico have long organized their governments to give 
priority to their bilateral relationships with the United States. 
Washington alone is poorly organized to address North American issues. 
To balance U.S. domestic interests with those in the continent, 
President Bush should appoint a White House adviser for North American 
affairs. Such a figure would chair a Cabinet-level interagency task 
force on North America. No President can forge a coherent U.S. policy 
toward North America without such a wholesale reorganization.
    For North America's second decade, there is no higher priority than 
reducing the economic divide between Mexico and the rest of NAFTA. A 
true community or even a partnership is simply not possible when the 
people of one nation earn, on average, one-sixth as much as do people 
across the border. Mexico's underdevelopment is a threat to its 
stability, to its neighbors, and to the future of integration.
    Europe demonstrated that the gap could be narrowed significantly in 
a relatively short period with good policies and significant aid. The 
Council Task Force proposed serious reforms by Mexico coupled with a 
North American Investment Fund, which was also proposed by Senator John 
Cornyn. This is a far-sighted initiative that deserves the support of 
this committee and Congress. I have written a report explaining the 
need for such a Fund and the way it could work. (See www.american.edu/
cnas/publications)
    North American governments can learn from the EU's efforts to 
establish EU Educational and Research Centers in the United States. 
Centers for North American Studies in the United States, Canada, and 
Mexico would help people in all three countries to understand the 
problems and the potential of an integrated North America--and to think 
of themselves as North Americans. Scholarships should encourage North 
American students to study in each other's country. Until a new 
consciousness of North America's promise takes root, many of these 
proposals will remain impractical.

   THE TRAVEL INITIATIVE, THE INTEGRATION DILEMMA, AND THE SECURITY 
                               PERIMETER

    September 11 and the subsequent U.S. response highlighted a basic 
dilemma of integration: How to facilitate legitimate flows of people 
and goods while stopping terrorists and smugglers. When Washington 
virtually sealed its borders after the attacks, trucks on the Canadian 
side backed up 22 miles. Companies that relied on ``just-in-time'' 
production began to close their plants. The new strategy--exemplified 
by the ``smart'' border agreements concentrates inspections on high-
risk traffic while using better technology to expedite the transit of 
low-risk goods and people. The decision to require passports to reenter 
the United States after brief visits to Canada and Mexico is another 
example of an approach that is too narrow to solve so fundamental a 
problem.
    Overcoming the tension between security and trade requires a bolder 
and more innovative approach. The three governments should negotiate 
and complete within 5 years a North American customs union with a 
common external tariff (CET). This would have a dual purpose. It would 
enhance the security on the border because guards could concentrate on 
terrorism rather than inspection of all the goods, and by eliminating 
cumbersome rules-of-origin provisions (which deny non-NAFTA products 
the same easy access), it would enhance efficiency and reduce the costs 
of trade.
    At the same time, our Task Force recommends that all three 
governments define and defend a continental perimeter. This means that 
all three governments have to have confidence that a terrorist has no 
more chance of entering their own country as their neighbors. A common 
exclusion list, better intelligence-sharing, and combined training are 
needed. The three governments should establish a ``North American 
Customs and Immigration Force,'' composed of officials trained together 
in a single professional school, and they should fashion procedures to 
streamline border-crossing documentation. The Department of Homeland 
Security should expand its mission to include continental security--a 
shift best achieved by incorporating Mexican and Canadian perspectives 
and personnel into its design and operation.
    Instead of creating new obstacles at the border, we should find 
ways to ease traffic and harmonize safety and transportation 
regulations. As a May 2000 report by a member of Canada's Parliament 
concluded, ``Crossing the border has actually gotten more difficult . . 
. While continental trade has skyrocketed, the physical infrastructure 
enabling the movement of these goods has not.'' The bureaucratic 
barriers to cross-border business impede as much as the infrastructural 
problems. There are 64 different sets of safety regulations in North 
America, 51 in the United States.
    The North American Council should develop an integrated continental 
plan for transportation and infrastructure that includes new North 
American highways and high-speed rail corridors. The United States and 
Canada should each develop national standards on weight, safety, and 
configuration of trucking and then negotiate with Mexico to establish a 
single set of standards.
    In addition, the United States and Canada should begin to merge 
immigration and refugee policies. It will be impossible to include 
Mexico in this process until the development gap is narrowed. In the 
meantime, the three governments should work to develop a North American 
Border Pass with biometric identifiers. This would permit expedited 
passage through customs, immigration, and airport security throughout 
the region. The program should build upon and unify the existing NEXUS 
(United States-Canadian) and SENTRI (United States-Mexican) programs. 
Only those who voluntarily seek, receive, and pay the costs for a 
security clearance would obtain a Border Pass, which would be accepted 
at all border points within North America as a complement to passports.
    These are alternatives to the Western Hemisphere Initiative. It is 
true that we have not done a good job of keeping track of people 
crossing the border, and the passage of the Real ID Act shows that 
there is a growing and grudging recognition that some form of National 
Identification Card may be needed. Congress really ought to address 
this issue head on. We should not use the driver's license, the Social 
Security card, the Medicare card, or our credit cards for anything 
other than the purpose for which they are intended. These cards are not 
intended to judge immigration status or citizenship. We will not only 
fail if we use them for that purpose; we will also undermine their real 
purpose. We don't want to discourage people from getting tested to 
drive because they fear that their status will be questioned.
    Similarly, compelling Minnesotans to get passports to cross the 
border into Canada for a Sunday afternoon picnic is not the best way to 
approach the border security issue. What we need is a new approach to 
jointly police the perimeter, a North American border pass to 
facilitate travel, and a Customs Union to allow inspectors to 
concentrate on terrorists rather than tariffs on goods.

                  DEFINING A NORTH AMERICAN COMMUNITY

    North Americans are ready for a new relationship. Studies over the 
past 20 years have shown a convergence of values, on personal and 
family issues as well as on public policy. An October 2003 poll taken 
in all three countries by Ekos, a Canadian firm, found that a clear 
majority believes that a North American economic union will be 
established in the next 10 years, The same survey found an overwhelming 
majority in favor of more integrated North American policies on the 
environment, transportation, and defense and a more modest majority in 
favor of common energy and banking policies. And 75 percent of people 
in the United States and Canada, and two-thirds of Mexicans, support 
the development of a North American security perimeter. The United 
States, Mexican, and Canadian Governments remain zealous defenders of 
an outdated conception of sovereignty even though their citizens are 
ready for a new approach. Each nation's leadership has stressed 
differences rather than common interests. North America needs leaders 
who can articulate and pursue a broader vision.
    I hope this committee will pursue the North American agenda beyond 
the travel initiative considered here. On June 23, the three leaders 
promised to publish a report with specific recommendations on how to 
deepen North American integration. These should be reviewed together 
with Senator Richard Lugar's far-sighted bill for a ``North American 
Cooperative Security Act'' and Senator Cornyn's ``North American 
Investment Fund.'' The time has come for us to define a true North 
American Community. Our security and prosperity depend on it.

    Senator Coleman. Thank you very much, Dr. Pastor.
    In many ways, it seems to me that as we see Europe trying 
to develop a system of lessening barriers and maximizing the 
economic potential of large land mass and a large economic 
base, a varied resource system, it almost seems, at least in 
this particular initiative, that we are kind of cutting 
ourselves off, that we are shrinking rather than expanding the 
opportunity that we have.
    And, again, security issues are security issues, but I 
worry about the direction. And what I am hearing from you, Dr. 
Pastor, is that instead of thinking small, we have got to think 
big, and ultimately I think we will, but I worry about the 
disruption before we get there.
    I want to thank both gentlemen for your very specific 
recommendations and specific suggestions. Mr. Ruden, if I can, 
you were very clear about the devastating impact if we move 
forward as scheduled with this passport requirement.
    What I am hearing is, in effect, you are saying Cancun is 
going to do well in this, but Jamaica and the Bahamas and that 
kind of travel is going to suffer. So are we creating winners 
and losers with the schedule that we are on?
    Mr. Ruden. Well, I--Mr. Chairman, I think that is the 
inevitable effect if you phase this in, and I well appreciate 
the--and I think everyone does--the effort that State and 
Homeland Security were making to try to ease the transition by 
doing it in steps. In a certain sense, that makes sense, but 
there are, as you indicated in your opening statement, 
unintended consequences and implications of that.
    There is a very strong economic competition between the 
countries in the Caribbean, some of whom have already got 
passport policies and some who do not. And regardless of what 
you think about that, that is the reality that we have to face 
in developing policy, so because the financial consequences and 
other issues associated with getting passports are so 
significant, they are going to cause people to make different 
choices about where they go if this regime is put in place. And 
that will affect the business in various parts of these areas 
and also Mexico and Canada eventually.
    Senator Coleman. The numbers I have--I think the U.S. 
Chamber number is 34.5 million visits by Canadians to the 
United States in 2003, $10.9 billion impact on the economy. 
Does the travel industry check the impact of folks coming in? I 
have the figure here somewhere, but I believe a very small 
percentage of Canadians have passports. Do we know, either of 
you gentlemen, whether we are working with Canada? I presume 
there is going to be reciprocity here. Do we know if we are 
working with them to change their system, to advertise to their 
people to do the things that have to be done?
    Mr. Ruden. I hope that we are preparing to do that. One of 
the difficulties here is that we do not really know what is 
going to happen next. And I have empathy for the folks from 
State and DHS, who are trying to do what the statute ultimately 
requires of them in an environment in which it is, I hope, 
clear now that December 31, 2005, simply does not work.
    And the President has expressed his concerns about the 
overall question of passports, certainly to the end of this 
year as a nonstarter, and it is just hard to imagine how we 
would cope with that, if you plug in the even minimum times to 
get through an ANPRM and then an NPRM that will follow it in a 
context where they are talking about as yet undisclosed 
alternatives to passports other than SENTRI and NEXUS and so 
forth, which I think everyone would agree do not work as 
substitutes.
    We are in an environment of multiple variables. I do not 
know what the Canadians would even say to us if we said, ``Get 
ready,'' because we do not know what is coming.
    Senator Coleman. Just one last followup, trying to look for 
an acceptable alternative. I did not hear that today. I did not 
hear from any of the witnesses a solution other than the 
passport, the NEXUS, the SENTRI, these are too narrow. They do 
not reach the population that has to be reached as we saw on 
the chart with Minnesota. We do not even have any of those 
processing abilities here in my State that I represent, a 
border State.
    Is it simply a matter of needing a more secure driver's 
license? At this point I am looking within the next year. What 
do you see as possible out there?
    Mr. Ruden. Frankly, I do not think in a year's time it is 
likely that you could bring 50 States' drivers' licenses to a 
state of secure issuances where the Federal Government would be 
prepared to accept them. And, in fact, there is a provision in 
the bill that was recently passed that deals specifically with 
this subject and says, State drivers' licenses will only be 
accepted by Federal agencies if they meet a rather imposing set 
of requirements covering their issuance and their security and 
so forth.
    There is no way the States are going to get there in 1 
year's time. So that instrument probably, or that possibility, 
may not exist realistically.
    I do think, however, there is an enormous amount of 
creative talent available in our industry that if we could sit 
down as an industry, not one off meetings with us and other 
people, which are valuable and helpful to both of us, but an 
industry kind of conclave or process where we bring this talent 
together.
    Everyone is committed ultimately to the same goal--better 
security, balanced with--against tourist--tourism interest and 
economic interest for the country. We could, I think--I am 
optimistic that we could find a way toward a new instrument 
that would achieve the objectives and have lower costs.
    The cost issue is a very, very important question for 
millions of people, who do not have passports today. We are 
told by State that a huge part of the passport cost, that $97, 
is the imputed component of overseas services that are rendered 
to citizens.
    I could imagine a situation--and it is reflected in our 
recommendations--in which you have an instrument that is issued 
that does not call upon the United States Government to provide 
those services and therefore would be cheaper, because you 
would not have to impute those costs to it. It would be good 
for identification, good for citizenship. You would still have 
those components. And that instrument might be a path that we 
could follow.
    Senator Coleman. I think, Mr. Ruden, that there would 
simply be a volume discount, going from 20 percent of the 
population to requiring everybody to have one. You would think 
it would be cheaper by volume.
    The last question--and this is to Dr. Pastor. Reflecting on 
your background, the National Security Council, can you assess 
for us today the state of security regarding our borders with 
Canada and Latin America, Central America? Or how problematic 
is the current situation and how much of the change that we are 
talking about is being dictated because of fear that the gaps 
are so big that if we do not act we are going to suffer some 
terrible consequences?
    Dr. Pastor. It is very hard to give a definitive answer to 
that question, but I think if you took just one dimension of 
that, which is the flow of people, I think the unauthorized 
migration from Mexico to the United States has not been 
diminished since September 11. It has probably been increased. 
I think an increase in border patrol, though it has been 
significant, has not dramatically affected that. So I think if 
that is the dimension that you look at in terms of asking 
whether we are more secure or less on our borders, I guess one 
would conclude that we are less secure.
    Senator Coleman. My frustration is that, in fact, this may 
be a little like the gun debate. Those folks that you are 
talking about that are less secure, they are not going to get 
passports. And those folks who are going to get passports are 
probably the ones who are not the problem.
    And I worry that that is the way we are looking at it. We 
are going to register all those who register and yet we still 
face massive border and immigration issues that are not at all 
addressed by what we are talking about here today.
    Dr. Pastor. No. That is quite correct. The issue of how do 
you affect unauthorized migration to the United States over the 
long term is not going to be solved by discussion of passports. 
It is going to be solved in the long term by reducing the 
development gap between Mexico and its northern neighbors on a 
significant enough commitment on the part of all three 
countries, particularly of Mexico, that would begin to have an 
effect very much like the European Union did for themselves.
    They, in 15 years, significantly narrowed the development 
gap between their richer and poorer countries and eliminated 
the kind of internal migration that many had feared when they 
first came into the EU.
    Senator Coleman. I appreciate that, Doctor Pastor.
    Senator Dodd.
    Senator Dodd. That is a great point, because I think we 
missed that. We talked about further integration, the kind of 
investments that we should be making in the infrastructure. And 
this is an infrastructure issue, and is critical. And I just 
want to know--talking about having just come back after 5 years 
of chairing and cochairing the Spain Council, just had our 
annual meeting in Seville, and Mel Martinez is now taking over 
the cochairmanship of this organization.
    Just watching what is happening in Spain, the tremendous 
investment of Spain and Portugal, Ireland, it is incredible 
what is happening. I mean, here was a country that 15 years 
ago, I think they were losing about 40,000 young people a year, 
who were immigrating out of Ireland to find jobs in England, 
Australia, and the United States. They now have a huge 
immigration problem because of the tremendous economy, in no 
small measure because of the tremendous investments that were 
made by the European Union to make sure that Ireland would be 
able to participate fully.
    So it is a very, very good point, and one that we should 
think about. We think of this situation, sometimes we think of 
it as aside, as not being part of a seamless garment here, if 
you will, of dealing with national security and building the 
kind of relationships economically that you are going to have. 
Too often, I think, we have a stovepipe, sort of, in how we do 
these things, because there is the national security stovepipe 
and there is the economic issues, that stovepipe, all of that 
diplomacy, and failing to recognize, that really, they are all 
one and the same issue. You are not going to succeed in any one 
of these so-called stovepipes, unless you succeed in the other 
two.
    And so you need to have--if you really want to deal with 
national security effectively, the economic issues play a huge 
role, and public diplomacy plays a huge role. And if you want 
to, you know, deal with public diplomacy, then you have to have 
good economics and good national security, so there is a great 
inter-relationship here.
    And you sort of touched on this already and I want to sort 
of--just raise sort of the same questions that I did with the 
witnesses from the consular section of the State Department. 
And I wondered--we have talked about NAFTA, Bob, but I wonder 
if you might also touch on CAFTA, because I think it is the 
next game here in town. And people say, ``Well that was--NAFTA 
was then.''
    But talk about CAFTA. Aside from the issues of whether or 
not you can actually come up with an agreement here that we can 
all support, or at least many people can support, tell me how 
this issue relates to CAFTA in your mind.
    Dr. Pastor. Well, if I could just follow your first point--
--
    Senator Dodd. Yes.
    Dr. Pastor [continuing]. And then I will answer that. 
Spain's growth and Ireland going from one of the poorest to the 
second richest----
    Senator Dodd. Right.
    Dr. Pastor [continuing]. Country in Europe was not just the 
result of free trade.
    Senator Dodd. No. No.
    Dr. Pastor. It was the result of $500 billion, $500 billion 
transferred from the richer countries of Europe to those 
countries. I have done a detailed analysis, even wrote a report 
on it, which I will be glad to give you a copy for the North 
American Development Bank.
    They wasted a lot of that money. They made a lot of 
mistakes. We do not want to replicate what Europe did, but we 
can also learn a lot from them, because the two investments 
that made the biggest difference was infrastructure that 
connected their markets to the northern markets----
    Senator Dodd. Right.
    Dr. Pastor [continuing]. And post-secondary education just 
10 percent of that.
    So there is a plan that could make a huge difference. The 
bottom line, however, comes back to your question, which is 
that trade--free trade and free investment does promote growth. 
It does help. CAFTA is in our interest, but it is not 
sufficient, just as NAFTA was not.
    You need to follow that with ways to take full advantage of 
this free trade and this competition, both by the United States 
and by the other countries like Mexico.
    I think CAFTA is very small from the perspective of the 
United States. Even the most optimistic projections suggest 
that our income is raised by $15 billion, theirs by $5 billion. 
I mean the issue of CAFTA is the one that you have wrestled 
with and contributed so much over the last 30 years. It is the 
security of Central America and its implications for the United 
States.
    And we cannot say ``no'' to Central America, the first time 
in its history where they are democratic, and they are looking 
toward the market of the United States.
    Senator Dodd. Yes.
    Dr. Pastor. That, I think, is the issue. We do not want to 
tangle all of the symbolic other areas or issues that are on 
the table, as we sometimes address with free trade agreements, 
but which may be the case in this as well. I think we ought to 
focus on that.
    But we also ought to think hard about: How do you build on 
a free trade agreement to make it work for all of the people 
and sustain the kind of public support that our country and 
that the Central Americans and Latin Americans need in order to 
keep pursuing free trade? Because that public support is 
missing right now.
    Senator Dodd. Well, just in the--again, your assessments--
and I--and you sort of touched on this already, but we raised 
the issues about the reciprocity problems, which you have 
touched on, and the public diplomacy--and maybe you will also 
comment on this, Mr. Ruden, because I--there is a tendency to 
say, ``Well, that is, you know--this is tourism.''
    But I think we fail to ever appreciate the value of 
tourism, and it is hard to put numbers on it. People like to 
put numbers, ``How many--what is your vacancy rate in hotels 
and how many meals were bought,'' and so forth. The harder 
question is: To what extent does someone come here, leave--how 
do they leave here, with what attitudes about us?
    I am sure there is no way we can really measure all of 
this. Do they come back again? What sort of experience--that we 
can measure. I suspect someone does not come back strictly for 
economic reasons, because they could go to some mall and make 
good purchases. But they had a wonderful experience here. They 
liked being here. And I wonder if there is any sort of support 
or evidence you can supply and the importance of this 
correlation.
    Mr. Ruden. Well, I do not have any particular data and I do 
not know that that data really exists, but the--when you engage 
in the business of tourism in other countries and we go to 
other countries frequently and interact with their tourism 
people and the commercial people in those countries that are 
looking to draw Americans there and also the countries that are 
sending people here, the view you generally get is that most 
people who come here, once they get here, have a favorable 
experience with America. And they take that back.
    We hope that most of the people we are sending, that our 
members send out of this country--and I believe this to be 
true--have favorable experiences in the foreign countries they 
go to. So your point about diplomacy, the personal diplomacy of 
individuals traveling is at the core of what we are really all 
about. And there is no contrary evidence. Maybe that, as much 
as anything, is the proof. There is nothing to indicate that 
what--that your point is not completely correct.
    Senator Dodd. Can I ask you one question just because I--we 
were talking about it--I think it was this morning I was 
talking to some people about it. It is only anecdotal, and so I 
do not want to suggest that maybe it is as widespread as some 
people may think, but I am getting a lot more--because I am 
fairly close to New York and JFK, as an airport. I have a lot 
of constituents, obviously, who travel, particularly in western 
Connecticut. Fairfield County, a lot of people who work in New 
York, and are heavily involved in international travel on 
business.
    I am getting a lot more complaints about how people are 
treated at that--at the entry points coming into the country, 
just attitudinally. I mean, it is just--again, I do not want to 
overstate the case here, unless you are going to tell me that 
this is something you are hearing too, but the lack of that 
kind of, ``Boy, we are glad you are here and we welcome you, 
and delighted you are going to be here and hope you will come 
back,'' just that sense of basic business practices.
    If you are running a small restaurant or haberdashery, or 
whatever else--the customer walks in the door. And I am worried 
that customers walking in our door are not being as warmly as--
received as they may have been in the past, and whether or not 
you are picking up any of this at all. Is this a--Bob, you may 
want to comment on this, too.
    Dr. Pastor. Yes. Let me just say I think you are 
understating the case, Senator. I think we have a real problem 
out there and it is partly direct and it is partly indirect. 
And I can feel it in American University.
    The direct effects occurred as a result of September 11 and 
our own fears. Our student population from the Middle East 
declined by more than half, and we have not recovered.
    And when I have met with people in the Middle East or in 
Latin America or in Asia, they have repeatedly talked about how 
much more difficult it is to get a hearing at the United States 
Embassy, to get a visa. And they are discouraged.
    We have--we have seen a tremendous decline in international 
students, which we are determined to reverse, but I think it is 
partly a result of that. And also frankly, I think there is a 
public relations problem we have in the world right now that 
you and others who travel know. It is very different.
    You can see it in public opinion polls. You can see it in 
the polls in Canada and Mexico. They have persistently, over 
the last 25 years, been very high about Americans. You have 
seen a real dip in their attitude toward the United States. And 
some of that is a result of foreign policy difference, and some 
is a result of fears in the United States.
    But we need to--I think our strength as a country relies on 
us as being an attractive model, and that has been diminished. 
And we need to, as a country, both parties, all of our leaders 
need to work together to try to reverse this image that people 
are getting about the United States right now.
    So I think you are absolutely right. There is a serious 
problem out there.
    Senator Dodd. Well, it has come--we got a vote on here--but 
let me just--on this notion, because I think it comes down--
obviously, look, we all recall the recrimination that can occur 
after 9/11, you know, how did these people get through the 
airport in Boston, how did they get on that plane, who was not 
doing their job watching these things? And you get that notion 
that, you know, people really had screwed up terribly.
    So the word kind of goes out. And you create an environment 
that, you know, it is not going to happen on my watch. And so 
there is almost this hostile kind of environment that I really 
worry about. Do you want to----
    Mr. Ruden. Senator, I have a slightly different perspective 
on that, I think. I believe it is the case based on personal 
experience and things I have read elsewhere that most people 
today who go to airports have one thing on their mind, and that 
is getting through what they perceive is a security gauntlet.
    It is everywhere and it is imposing, it is threatening to 
your ability to reach your plane on time, especially if you 
arrive late. There is uncertainty a lot of times about--because 
things have changed fairly frequently. Do--when do I need to 
show my ID? How many times do I need to show it? Do I need to 
take my shoes off?
    I think the people trying to do this by and large are doing 
a remarkably good job----
    Senator Dodd. I agree with that.
    Mr. Ruden [continuing]. And part of it is anxiety raised by 
the fact that we have a new deal here. It is a new system, and 
it is not going to go away.
    I think it is working--US-VISIT, in particular, I think the 
State Department has done a remarkable job of promoting and 
advertising and implementing that. We thought at the outset 
there might be real big problems with that. And, in fact, it 
takes a few seconds, people go through it. I know there are 
some concerns----
    Senator Dodd. I am talking less about people coming into 
the country than I am talking about going through the airport 
out here at National. I am talking about the time when you get 
off that plane and you are coming through--before you have even 
met anybody, just an attitudinal----
    Mr. Ruden. I think that difficulty is probably true 
everywhere in the world that you have to go through customs and 
immigration. It is not a particularly warm experience. I have 
been to some countries which were near police states, and you 
knew it when you landed.
    It was different. And by those standards coming into 
America for a foreign person, I think, is a great experience, 
but it is nonetheless an imposing thing to cross a national 
border and face those people looking at you as possible 
suspects.
    Senator Dodd. I say it is more anecdotal, but I have heard 
enough of it that it concerns me a little bit about--anyway, 
Mr. Chairman, thank you for a good hearing.
    Senator Coleman. Thank you, gentlemen. Your testimony has 
been very helpful, very focused, very specific, and not only 
will we consider it, but we hope that the State Department and 
the Department of Homeland Security also considers it as well.
    I will keep the record open for 7 days. This hearing is now 
adjourned.
    [Whereupon, at 4:09 p.m., the hearing was adjourned.]

                                  
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