The United States has halted Argentina’s pursuit of a visa waiver at the moment when the process for its inclusion in the program was beginning, marking a new obstacle for President Javier Milei ahead of an important midterm election on Sunday. During Homeland Security Secretary Kristi Noem’s visit to Buenos Aires in July, South America’s second-largest economy initiated efforts to implement visa-free travel to the US. However, that process is currently suspended, as indicated by an individual knowledgeable about the situation.
The US Secretary of State, Marco Rubio, expressed apprehensions regarding a corruption scandal that is affecting the libertarian administration. He sought further discussions on the matter prior to finalizing any agreement, as reported by Axios, which initially broke the story on Wednesday. A delegation headed by the leader of Argentina’s tax agency returned without any agreements last week following a visit to Miami, according to Axios, which referenced unnamed sources. The news outlet ascribed the “diplomatic snub” to insufficient communication between the departments of Noem and Rubio. Argentina’s Foreign Minister Gerardo Werthein has yet to provide a response to a request for comment regarding the matter. However, a government official from Milei’s administration, who spoke on the condition of anonymity to La Nación, characterized the Axios report as false and malicious. The head of the tax agency is quoted in the article refuting any connection between his team’s trip and Argentina’s potential entry into the US visa waiver programme. Milei, having meticulously fostered an ideological connection with US President Donald Trump, has faced persistent scrutiny due to a bribery scandal over the last fortnight.
On August 20, local media broadcast audio recordings featuring a government official and a personal associate of the libertarian leader, who were purportedly discussing a kickback scheme related to a state contract for pharmaceutical purchases at the ANDIS national disability agency. The official, who was promptly dismissed, identified the president’s sister and general secretary, Karina, as a benefactor in the recordings. This week, a judge prohibited journalists from disseminating further recordings of Karina herself. Milei and his cabinet have refuted allegations of any misconduct. The Argentine government has faced challenges in regaining control of the narrative following the leak of the audios. Last week, two campaign events concluded unexpectedly: the first was interrupted by the throwing of rocks at Milei, while the following day, a confrontation erupted between protesters and Karina’s team during a different campaign stop. The Treasury announced Tuesday that it intends to intervene to support the nation’s currency, as the scandal compounds existing challenges undermining investor confidence. Argentina’s assets have faced significant pressure in recent weeks due to a series of political and economic challenges confronting the government.
Dollar sovereign bonds have lagged behind their emerging-market counterparts over the past month, as the peso persists in its decline despite interventions from the libertarian government. Milei is set to encounter a crucial vote on Sunday in Buenos Aires Province, a region that constitutes nearly 40 percent of the national population and has a historical tendency to support the opposition Peronist movement. Investors are interpreting the provincial election as a crucial indicator of future developments in October, when the entire electorate of Argentina will participate in the renewal of a significant portion of Congress.