January 19, 2018
Sunday, March 6, 2016

Reciprocity fee: get rid of it

Why charge more for travelling to Argentina?
Why charge more for travelling to Argentina?
Why charge more for travelling to Argentina?
By Wayne Bernhardson
For the Herald

There’s a case for not charging foreign travellers to visit

In late 2009, Cristina Fernández de Kirchner’s government imposed a tourism “reciprocity fee” for passport-holders from the United States, Canada and Australia. On the face of it, this was a just measure — those countries require visas for Argentine citizens, who must pay for the privilege of merely applying to visit the US (US$160), Australia (US$100) and Canada (US$100).

That visa process often involves travelling great distances for a consular interview. My own brother-in-law and his wife, who travelled to California from their home in Villa Regina last month, also had to make a special trip to Buenos Aires — at additional expense in time and money — for a perfunctory interview at the US consulate in Palermo.

In this context, requiring comparable fees for visitors from the US and countries with similar policies was never unfair. One might even argue that the Argentine policy was relatively liberal since it never obliged those visitors to apply for an advance visa. Still, I would suggest that the reciprocity fee was (and is) a foolish and counter-productive measure that has made Argentina seem a less than welcoming destination to many potential visitors.

As the new Argentine administration took power, it moved quickly to eliminate multiple exchange rates and the currency clamp, which caused confusion and problems for visitors who could not withdraw money from local ATMs except on disadvantageous terms. This was an important step forward for the tourism sector (although the issue has not gone away completely because of low withdrawal limits per transaction and the consequent need to carry large amounts of US and Argentine cash).

Still, eliminating the “reciprocity fee” would be another important step, for various reasons. In the first place, it adds to the cost of visiting a destination that is already expensive to reach because of distance — for a family of four, it means up to an extra US$640 being diverted to the Treasury rather than circulating in the economy at large. In the second instance, paying the fee requires opening an account with an unfamiliar Argentine payment system to which potential visitors may not wish to surrender personal information online. Third, the arriving visitor must show an easily lost or misplaced printout of the transaction.

A Chilean-born friend (with US and Canadian passports), who leads tours into Argentina, described the process and its pitfalls for me as “cumbersome but doable, it was not always clear what the next step was but I got through it. Largely I succeeded because I have done a lot of payments online but this one had its slight oddities. I am not sure a little old lady from the Midwest who does not get on the computer a lot will be able to adequately manage this.” He also noted that the English-language version was clumsily unprofessional: “The oddities are mainly some of language, where you have to know to ’add form’ and ’print ticket’ instead of ’upload data’ and ’print receipt’ or something that makes more sense.”

While none of these may be an insuperable obstacle — visitors from all three countries have not disappeared — they cannot compare with the simplicity of arriving at Ezeiza or any land border and simply having your passport stamped. On the positive side, the fee is valid for 10 years but even that’s not totally positive. In my case, since I travel to Argentina every year, the annual amortization amounts to only US$16, but it does require me to carry an expired passport with proof of payment (at the time, I was able to pay on arrival at Ezeiza, which is no longer possible). My dual passports invariably confuse immigration officers, especially at remote border crossings in Patagonia, because their numbers are different.

Those are short-term considerations but I think the Fernández de Kirchner administration also struck out on a key longer-term perspective. One booming aspect of the travel and tourism sector is youth travel, as evidenced by the proliferation of hostels that appeal to students and other budget travellers. Their absolute monetary contribution to the economy may be smaller than luxury accommodations and gourmet restaurants, but it often goes to needier providers, such as snack bars, and neighbourhood restaurants and grocers. Today’s backpackers, though, are tomorrow’s prosperous professionals and if they have a good experience now, they’re likely to return when their financial resources are far greater. Repeat visitors are better than one-timers.

This, in my opinion, is a missed opportunity. Certainly some of those travellers have made their way to Argentina but we can only surmise that others have bypassed Argentina for, say, Chile — which eliminated its reciprocity fee in 2013. To some degree, of course, Argentina’s reciprocity fee — which I often refer to as a “retaliation fee” — owes its origins to the recent administration’s impulsive politics and awkward relations with the United States, to the detriment of visitors and Argentina’s own future.

Along with the reform of multiple exchange rates, unilateral elimination of the “reciprocity fee” would bring in part of the valuable foreign exchange that the country needs to reactivate its economy. It would be a major step toward improving Argentina’s competitiveness and, in this context, it’s worth noting that Brazil will suspend its advance visa requirements during the upcoming 2016 Olympics.

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Edition No. 5055 - This publication is a property of NEFIR S.A. -RNPI Nº 5343955 - Issn 1852 - 9224 - Te. 4349-1500 - San Juan 141 , (C1063ACY) CABA - Director Perdiodístico: Ricardo Daloia