Falklands row could hit UK's South American ambitions

Sun Apr 1, 2012 6:50pm EDT
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By Adrian Croft

LONDON (Reuters) - Thirty years after Britain and Argentina went to war over the Falklands, relations are at their chilliest in years as Buenos Aires launches a multi-pronged diplomatic offensive to assert its claim to sovereignty over the South Atlantic islands.

While a new military conflict is seen as highly unlikely, the dispute could jeopardize Britain's drive for closer economic and trade ties with emerging Latin America powers such as Brazil that it hopes will kickstart the stagnating British economy.

The discovery of oil off the Falklands has raised the stakes, leading Argentina to threaten to sue companies involved in oil exploration and to protest to the United Nations over British "militarization" of the South Atlantic.

On Sunday, the eve of the 30th anniversary of the start of the Falklands War, the Sunday Telegraph said Argentina had threatened legal action against British and U.S. banks that gave advice to or even wrote research reports about companies involved in the Falklands oil sector.

Buenos Aires has won support from regional bodies, and the Latin American trading bloc Mercosur has banned port visits by Falklands-flagged ships.

Argentine President Cristina Fernandez and British Prime Minister David Cameron have traded accusations of "colonialism".

Argentina wants to renegotiate a 1999 accord that allows a weekly flight to the Falklands by Chilean airline Lan, proposing that state-run Aerolineas Argentinas should fly to the remote islands, some 300 miles off Argentina, instead.

The islanders are skeptical, saying the change would increase Argentina's control over access to the Falklands.   Continued...

Visitors read the names of the fallen Argentine soldiers during Falkland Islands War on a Malvinas Cenotaph in Ushuaia April 1, 2012. April 2 marks the 30th anniversary of the war over the island chain, known commonly in Argentina as "Las Malvinas". Diplomatic tensions have surged in recent months ahead of the 30th anniversary of the brief war which left about 1,000 people killed before Argentina surrendered to the British on June 14, 1982. The two countries fought over the South Atlantic archipelago, and the Falklands' assembly said it was hard to trust Argentina. REUTERS/Enrique Marcarian