VZCZCXYZ0009
OO RUEHWEB

DE RUEHBU #0603/01 0880020
ZNY CCCCC ZZH
O 290020Z MAR 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7681
INFO RUEHBR/AMEMBASSY BRASILIA IMMEDIATE 5921
RUEHLO/AMEMBASSY LONDON IMMEDIATE 1193
RUEHMN/AMEMBASSY MONTEVIDEO IMMEDIATE 6316
RUEHSG/AMEMBASSY SANTIAGO IMMEDIATE 0304
RUEKJCS/SECDEF WASHINGTON DC IMMEDIATE

C O N F I D E N T I A L BUENOS AIRES 000603 
 
SIPDIS 
 
SIPDIS 
 
WHA/BSC FOR BARNES, FRIEDMAN, AND BLAKENEY 
EUR/UBI FOR ROY AND PEASE 
 
E.O. 12958: DECL: 03/28/2017 
TAGS: PGOV PMIL KTIA AR UK
SUBJECT: ARGENTINA ENDS FALKLANDS/MALVINAS OIL AND GAS 
ACCORD 
 
Classified By: Ambassador E. Anthony Wayne for reasons 1.4 (B) and (D) 
 
¶1. (C) Summary: On March 27, Foreign Minister Taiana 
announced that the GOA would end a 1995 accord with the UK 
aimed at encouraging cooperation on oil and gas exploration 
around the Falklands/Malvinas islands.  He maintained, 
however, that the GOA will continue to abide by the 1989-1990 
sovereignty umbrella agreement but reiterated GOA demands for 
renewed sovereignty talks.  The Casa Rosada separately 
announced that Kirchner will not attend the 25th anniversary 
commemoration of the Falklands in Ushuaia as originally 
anticipated, and that Vice President Scioli will attend 
instead. 
 
¶2.  (C)  Publicly, the UK Embassy expressed regret that the 
GOA decided to &send a political message during a sensitive 
year8, given that this year marks the 25th anniversary of 
the conflict.  On March 28, British DCM Andrew Jackson told 
DCM that while the UK regrets the decision, the UK was not 
reading too much into it, given that the accord had been 
dormant since 2000.  He stressed that the UK was "bending 
over backwards to be constructive" on the Falklands and 
pointed to the UK's decision to allow 400-500 veterans and 
next of kin of fallen Argentine soldiers to participate in a 
private event inaugurating a memorial in the Argentine 
cemetery on Darwin.  Jackson suggested that Kirchner's 
decision to walk away from the 1995 accord was an electoral 
ploy to score points domestically.  Jackson, and the Buenos 
Aires press, speculated that Kirchner opted out of the 
commemoration event in Ushuaia, Tierra del Fuego to avoid 
attracting attention over public sector strikes in the 
province and nearby Santa Cruz province.  Although Kirchner 
will likely commemorate the anniversary with a tough message 
to London, the Deputy Defense Minister told the Ambassador 
that he will likely criticize the military dictatorship's 
decision to use Argentina's claims over the islands as a 
pretext for war.  At the same time, we believe Kirchner will 
likely reiterate previous statements that the GOA wishes to 
resolve the sovereignty question through diplomatic means. 
End Summary. 
 
--------------------------------------------- ------------ 
Agreement Terminated, Kirchner Cancels Commemoration Trip 
--------------------------------------------- ------------ 
 
¶3.  (SBU)  On March 27, Foreign Minister Taiana announced 
that the GOA would end a 1995 accord with the UK aimed at 
encouraging cooperation on oil and gas exploration around the 
Falklands/Malvinas islands.  The decision comes six days 
before the 25th anniversary of the Falklands/Malvinas war. 
According to local press reports, Taiana justified the 
decision by stating that the UK had "unilaterally" decided to 
issue licenses for oil and gas exploration near the disputed 
territories.  Taiana further contended that the UK intended 
to limit cooperation with Argentina to an area of only 21,000 
suare kilometers, while reserving an additional 410,000 
square kilometers for the UK's exclusive use.  He claimed the 
UK has used the agreement to justify its "illegitimate claims 
over the islands" and noted that the accord had been 
&frozen8 since 2000.  Taiana insisted, however, that 
canceling the accord did not mean the GOA would walk away 
from the 1989-1990 sovereignty umbrella agreement.  He also 
maintained that the GOA is not opposed to cooperating with 
the UK, but that cooperation should lead to a renewal of 
sovereignty talks. 
 
¶4.  (SBU)  The press also reported a separate Casa Rosada 
announcement that Kirchner will not attend the 25th 
anniversary commemoration of the Falklands in Ushuaia as 
originally anticipated.  Vice President Scioli will 
reportedly fill in for Kirchner, and Taiana and Interior 
Minister Fernandez are also expected to attend.  Government 
officials said the cancellation was due to "work issues," but 
there is public speculation that unrest among state workers 
in Tierra del Fuego and nearby Santa Cruz (Kirchner's home 
province) could have made the trip politically unsuitable. 
 
¶5.  (SBU)  Publicly, the UK Embassy expressed regret that the 
GOA decided to &send a political message during a sensitive 
year8, given that this year marks the 25th anniversary of 
the conflict.  It also announced that the UK, in conjunction 
with the Falkland Islands Council, had agreed to allow 
Argentine veterans and next of kin to visit the Argentine 
cemetery in Darwin to inaugurate a memorial to Argentine 
soldiers who died in the war.  In addition, the UK Embassy 
reiterated HMG's invitation for the GOA to participate in a 
commemoration ceremony on June 14th of this year.  The GOA 
has declined the invitation, noting that the UK intended to 
commemorate the war on the day Argentina surrendered after 
the 10-week war. 
 
--------------------------------------------- ------------- 
UK: Decision is Electoral--but don't read too much into it 
--------------------------------------------- ------------- 
 
¶6.  (C)  On March 28, DCM met with British Deputy Head of 
Mission Andrew Jackson to discuss the GOA decision to end the 
accord.  Jackson began by noting that the Argentine press 
inaccurately reported that FM Taiana had called Ambassador 
Hughes in on March 27 to inform him of the GOA decision. 
Rather, Ambassador Hughes was to meet with Taiana to discuss 
the UK's proposal to restart charter flights from Argentina 
and other South American countries to the Falklands islands, 
noting that such flights represented economic opportunities 
for both Argentina and the Falklands.  (Note:  At present, 
LAN airlines is allowed to stop in Rio Gallegos, Argentina 
once a month on its Santiago-Stanley via Puerto Arenas 
flight.)  Instead, Ambassador Hughes met with Deputy Foreign 
Minister Garcia Moritan, who explained that the GOA was more 
interested in resuming scheduled flights to the islands 
rather than charted flights.  At the end of the meeting, 
Garcia Moritan passed a letter to Ambassador Hughes informing 
him of the GOA's decision to walk away from the 1995 oil and 
gas accord. 
 
¶7.  (C)  While the UK regrets the decision, Jackson stated 
that the UK was not reading too much into it, noting that the 
Argentine-UK commission on oil and gas exploration around the 
Falklands islands had been dormant since 2000.  He thanked 
the USG for weighing in with the GOA last July urging them 
not to take any unilateral action to change the status quo. 
He noted that other commissions such as the fisheries and 
demining commissions had been much more active.  Jackson 
mentioned that both countries met two weeks ago to discuss 
fisheries issues where they decided to conduct a joint 
fishing cruise at the end of the year.  Jackson acknowledged 
that the fisheries commission had not been functioning very 
well and viewed the decision to conduct the joint cruise as a 
positive sign that the Argentines want to keep the dialogue 
going.  He also asserted that the UK was "bending over 
backwards to be constructive" on the Falklands, including: 1) 
inviting 400-500 veterans and families of fallen Argentine 
soldiers to a private event at Darwin Cemetery in November of 
this year; 2) sharing fisheries data with the Argentines; and 
3) agreeing to conduct a joint feasability study on demining 
issues. 
 
¶8.  (C)  Jackson suggested that Kirchner's decision to walk 
away from the 1995 accord on the eve of the 25th anniversary 
was based on electoral politics.  That the GOA chose to walk 
away from the oil accord as opposed to the fisheries accord 
indicates that the GOA wanted to send a signal to London 
without damaging Argentina's economic interests, Jackson 
indicated.  When asked about the Casa Rosada's announcement 
that Kirchner would not participate in a planned April 2 
commemoration event in Ushuaia, Tierra del Fuego, Jackson 
speculated that Kirchner had opted out of the event to avoid 
attracting attention over public sector strikes in the 
province.  Nevertheless, he still expects Kirchner to 
commemorate the anniversary with a tough message to London. 
 
------------------------------- 
Domestic Traction At What Cost? 
------------------------------- 
 
¶9.  (C) Comment: The Kirchner administration has pushed its 
claims to the islands harder than any other recent Argentine 
administration and is using the 25th anniversary as an 
opportunity to again push the issue--a move that plays well 
to nationalistic sentiments here.  Kirchner's latest attempt 
to pick a fight in the international arena again exemplifies 
the administration's intent to make foreign policy decisions 
largely for the political traction it wins at home; the 
announcement was aimed primarily at domestic audiences with a 
view to the October presidential elections.  Although the 
decision is one of the most drastic measures taken since the 
GOA reestablished diplomatic ties with the UK in 1990, the 
practical effects on Argentina, the UK, and the islands are 
likely to be minimal. 
 
¶10.  (C)  Kirchner's decision not to participate in the 25th 
anniversary commemoration, however, may reflect a recent 
penchant for distancing himself from his own controversial 
foreign policy decisions.  We note that Kirchner and much of 
his Cabinet were inaugurating an international film festival 
in Mar del Plata during Chavez's March 9 anti-U.S. rally. On 
the other hand, Kirchner has been getting much bad press, 
over strikes in his home province of Santa Cruz and may not 
have wanted the prospect of similar protests in Ushuaia. 
 
¶11.  (C)   Still, Kirchner most certainly will comment on the 
occasion.  Deputy Minister of Defense Ocampo told the 
Ambassador that Kirchner's anniversary remarks will 
underscore Argentina's valid claim to the islands, but 
criticize the military dictatorship's decision to use this as 
a pretext for a war that was poorly planned and executed.  At 
the same time, we believe he will likely reiterate previous 
statements that the GOA wishes to resolve the sovereignty 
question through diplomatic means.  Still, Kirchner's 
decision demonstrates yet again that he is willing to risk 
damaging bilateral relationships for short-term political 
gain--witness the GOA's dispute with Uruguay over pulp mills 
and its fight with Chile over gas supply contracts. 
Kirchner's pugnacious style is not limited to the foreign 
arena.  In recent weeks, he has criticized the Catholic 
Church for siding with Santa Cruz protesters demanding higher 
wages and his Interior Minister, Anibal Fernandez, has 
publicly suggested that the head of Argentina's highest 
Criminal Appeals Court to "quit for the good of the country" 
when he characterized Kirchner's March 24 call to speed up 
human rights trial as "judicial interference."  As the 
electoral season heats up in earnest, we can expect Kirchner 
to continue his confrontational antics. 
WAYNE