US passport rules threaten trade

THE CBI in Washington has warned that new passport requirements for entering the US and other travel restrictions may harm trade between the two countries, with British travellers facing disruption for at least two years.

The travel hurdles stem from Washington's demand that, from 26 October, all visitors must have biometric - face and fingerprint recognition - passports or lose visa waiver privileges.

But Whitehall insiders say the British Government is years away from providing the passports. 'They are all at sea over this,' one senior official said.

Existing passport holders will still be allowed to enter under the visa waiver programme.

The Home Office insists the biometric passports will be ready by mid-2005, but the Government has not even put the complex process out to tender yet. Indeed, it has only just started a six-month trial of the technology.

Insiders point out that the Cabinet Office recently issued a document on the subject containing contradictory information on which technology would be required.

Many in the industry do not expect the new passports to be ready until mid-2006 at the earliest.

'Yes, the technical issues will have been resolved by mid-2005 but the political considerations and the testing mean that a more realistic target is 2006,' said Olivier Chevrier, marketing director of Gemplus, one of the world's leading smart-card makers.

A spokeswoman for the CBI in Washington warned that extra travel burdens on the British business community - including the passport issue - could hit trade between the nations.

'The totality of disruption in sending goods and key people to the States could potentially deter some British companies from doing business here. It is a matter of concern to us and we have raised the issue here,' she told the Evening Standard.

'The costs of the visa are not insignificant but it's really a question of the time it takes to get a visa, the paperwork involved.

'A few years ago, doing business in the US was a no-brainer for the British. Now, they are having to weigh up the options to see if they really want to do business here.'

Britain and the US currently share around £250bn of mutual investments, with annual trade between the countries running at around £44.5bn.