Argentine President Cristina Fernandez de Kirchner met with Chilean President Sebastian Pinera on March 15, just days after her meeting with British Minister of State for Foreign Affairs Jeremy Browne. In both meetings, Argentina's claim of sovereignty over the British Falkland Islands (known in Argentina as the Malvinas) was the topic of discussion. The United Kingdom and Argentina have been courting Chile's support in the long-standing bilateral dispute because Chile is the only country in the Southern Cone with a vested interest in the United Kingdom's maintaining control over the Falklands.
Tension has been rising between Argentina and the United Kingdom in the run-up to April 2, the 30th anniversary of the Falklands War. Chile, which has its own territorial disputes with neighboring countries, does not wish to see border changes in its region, but it also must take care not to upset relations with a regional player.
A couple of recent developments have aggravated the countries' long-running dispute over ownership of the islands. First, significant offshore oil and natural gas reserves have been discovered near the Falklands. Second, as the economic situation in Argentina has deteriorated over the last decade, rhetoric regarding the Malvinas has served as a useful tool for promoting nationalistic sentiment in the country.
Despite aggressive rhetoric and the bitter memories Argentines harbor from the war, a military confrontation over the disputed islands is unlikely. Argentina has not modernized its armed forces since the military dictatorship fell in 1983, in part because of the extremely poor relationship between the military and the current administration. Furthermore, Argentina remains isolated from international credit markets and, with troubles meeting its own budgetary needs at home, it likely cannot afford a war. Nevertheless, Buenos Aires, aware of significant cuts to the United Kingdom's defense budget, may sense an opportunity to challenge the United Kingdom's stance.
To push the United Kingdom toward a settlement, Argentina has threatened to appeal to the United Nations and has used the Union of South American Nations (UNASUR) to impose a blockade against Falkland-flagged maritime vessels. Argentina has also threatened to declare as illegal any oil activity in the waters surrounding the islands. Brazil, Uruguay and Chile have all agreed to the blockade. Bolivia, Ecuador, Peru, Paraguay and Venezuela have all expressed support. Of these countries, Brazil and Chile are the most important.
Brazil has many reasons to support Buenos Aires. Brazil is not only a major trading partner of Argentina's, but it is also the creator of UNASUR and has an interest in proving that the multilateral forum can be effective. Brazil's support of Argentina's claims, however, likely will not extend to approval of military action. With major offshore oil projects in the works, a conflict in the South Atlantic could risk key strategic interests that Brazil's military is not yet prepared to defend. Brazil has thus hedged its agreement to the blockade on Falkland-flagged vessels by saying it will allow any British-flagged vessels through the blockade, regardless of their origin.
Though Brazil is a much larger country, Chile is in many ways more important regarding this issue. Currently, Chile is the only South American country with direct flights to the Falkland Islands. Any blockade would thus require Chile to go beyond merely restricting port access. Furthermore, Chile has undermined Argentina's claim to the islands in the past: During the war in 1982, Chile supplied intelligence about Argentine military and radar systems to the United Kingdom.
In addition to a long-standing rivalry with Argentina, Chile has an interest in preventing any border shifts in the region because the country has territorial disputes with Bolivia and Peru. The United Kingdom established its rule over the Falkland Islands in 1833; by agreeing that the islands belong to Argentina, Chile would set a precedent that could affect Bolivia and Peru's territorial claims over the region of northern Chile, which Chile conquered in the 1879-1883 War of the Pacific. The war left Bolivia landlocked and created 37,900 square kilometers (14,600 square miles) of contested territory along the maritime border with Peru. Bolivia plans to bring a lawsuit against Chile at The Hague this year, claiming sovereign access to the Pacific coast. Peru presented its case against Chile at The Hague in 2008, and a decision on the case may be made in 2012.
Realizing the regional interests in this issue, the United Kingdom over the last six months has sent top diplomats to Brazil and Chile to seek support — or at least neutrality — from regional players as London attempts to settle its dispute with Argentina. Although Brazil has no interest in a South Atlantic war, Chile has an active interest in the Falklands' remaining British. Though Pinera has publically said that Chile supports Argentina, he has at the same time asserted that Chile has a special relationship with the United Kingdom. Going forward, Chile will continue to be stuck in the middle of this dispute, supporting the British while trying to soothe relations with an increasingly confrontational Argentina.