Argentina and Chile have temporarily avoided going to war over the Beagle Channel. On January 8, in Montevideo, Uruguay, the two countries agreed to resubmit their dispute to mediation, this time to the Pope, and to withdraw troops from their 2,600 mile border. Conflict over possession of three small islands in the mouth of the Beagle Channel brought these otherwise like-minded regimes to the brink of war in mid-December. Relations between Argentina and Chile have been tense ever since Argentina, in January 1978, officially rejected the May 1977 arbitration award of the islands to Chile by a tribunal of judges from the International Court at The Hague and the Queen of England. Though the press has often presented the rift between the two dictatorships as a case of nationalist outrage at Chilean incursion into the Atlantic, an area long thought by Argentineans to be theirs, this interpretation hardly explains the intensity of recent hostilities. Much more is at stake than a case of injured national pride. That the Chilean and Argentinean juntas have been up in arms for the past year over possession of three barren islands -Lennox, Nueva and Picton, which lie south of Tierra del Fuego-seems absurd. But in recent years the cluster of islands and the waters around them have assumed a new importance in terms of the countries' economic and strategic interests in the Southern Cone. THE GLIMMER OF BLACK GOLD A geological survey done in 1973-74 revealed the continental shelf off Argentina to be rich in hydrocarbon sediments. Though the most promising area lies within the territorial waters of the Falkland (Malvinas) Islands (an area occupied by Britain but claimed by Argentina), both Chile and Argentina have been exploring for oil in the area around Tierra del Fuego since 1977. Adverse logistics and severe weather conditions previously were enough to inhibit exploration, but rising oil prices and mounting exports have forced both countries to search for new sources. ENAP, Chile's state-owned oil firm, struck oil five times out of seven during exploratory drilling in the Strait of Magellan early in 1977. ENAP estimates that full exploitation of marine sources by 1982 would save Chile $150 million annually through the mid-1990s. Argentina has been extracting 30,000 barrels of oil a day in Tierra del Fuego and in September 1977 began a major exploration program involving foreign capital in the South Atlantic. With both regimes hard up for foreign exchange neither junta can afford to lose a drop of potentially national oil. Chile imports approximately 80% of the oil it consumes. Though Argentina imports only 10% of its crude needs, at a cost of $250 million annually, its oil reserves have dwindled in past years and the junta hopes that deposits in the continental shelf will lead to self-sufficiency. STRATEGIC CONSIDERATIONS Strategically the islands are significant in two senses: bilaterally in terms of relations between Chile and Argentina; and globally, to the extent that the islands are necessary for the defense of the South Atlantic. In terms of bilateral strategy, in the event of any conflict, Chilean possession of the three islands would give Chile the power to block access to the channel and thereby isolate Ushuaia, an Argentine port and naval installation on the channel. The three islands' territorial waters project a region of sovereignty which further alters the bilateral balance by practically cutting Argentina off from major routes of maritime communication with the Antarctic, and by potentially giving Chile new rights to portions of the Antarctic presently claimed by Argentina. (Though a thirty year treaty signed in 1961 suspended all territorial claims to the Antarctic, eight of the twelve signatories maintain claims.) The 1977 arbitration gave Chile not only the three islands, but also put Chile in the position of being a two-ocean power with three routes of access between the Atlantic and the Pacific: the Drake Passage, the Strait of Magellan, and the Beagle Channel. This occurs precisely at a moment of growing importance of the South Atlantic for the global balance of power, elevating Chile to the status of necessary partner in any attempt to control this region. With the closing of the Suez Canal, following the Arab-Israeli War, huge supertankers, too large to transverse either the Suez or Panama Canals, were built to transport oil from the Persian Gulf. Since then all oil traffic out of the Middle East must take the long trip around Africa's Cape of Good Hope and up through the Atlantic. In 1976, following the MPLA victory in Angola, there was talk of forming a South Atlantic Treaty Organization (SATO) along the lines of NATO. The United States, Argentina, Uruguay, Brazil and South Africa were to participate in this defense organization to safeguard trade routes in the South Atlantic. At the time Brazil, preferring to develop ties with the ex-Portuguese colonies in Africa, refused to ally itself with'the racist South African regime. Nevertheless, with the volatile situation in southern Africa, SATO remains on the agenda. The Cuban weekly, Bohemia, reported that as recently as December 11th, the South African ambassador to Brazil reiterated his government's desire to form SATO with Brazilian participation. The Chilean junta, which has always been eager to participate in SATO, if it retains possession of the islands, would almost certainly be assured affiliation to any such defense organization. Thus Chile, in terms of global strategy, would acquire new importance. GORILLA MANEUVERS The dispute and rivalries between Argentina and Chile are nothing new. A 1902 arbitration agreement with Britain prevented an earlier war between the two Andean neighbors and awarded the islands south of the Beagle Channel to Chile. But the question remained: Does the channel enter the Atlantic north or south of the islands? Binding arbitration to settle the question once and for all was agreed to in 1971. By the time of the arbitration award in May 1977, however, the islands had assumed their new significance and Argentina, in January 1978, rejected the decision claiming that it violated an 1893 treaty under which Argentina renounced all territorial claims to the Pacific Ocean and Chile did likewise for the Atlantic. Though Chile immediately protested that the decision was binding, Argentinean military pressure forced Pinochet to agree to initiate discussions on mutual interests in the south, but not on the Beagle Channel in particular. Throughout the talks, which began in March, Argentina employed a combination of military and economic pressures to try and convince the Chileans to compromise. But the junta, with the arbitration award and international law on its side, wouldn't budge. Once the dispute was on the agenda neither party had anything new to say to the other. As the end of the negotiations neared, both sides prepared for war. According to the Washington Post, arms purchases over the past months have cost Argentina over $750 million and Chile over $500 million. In a show of military strength, Argentina moved troops and equipment into the contested area and 500,000 reservists were put on call. It was also reported that a number of clothing factories and drug companies were ordered to produce only for military consumption. Throughout the past months Argentineans have been bombarded with a flurry of nationalist propaganda glorifying the armed forces, while Buenos Aires' eight million residents were subject to air raid drills at the end of October. Though with less publicity, Chile also prepared for a military confrontation. The deadline for negotiations came November 2, 1978. After six months of talks both sides failed to reach a settlement. To mitigate the situation they agreed to disagree and to resume talks at a later date. Hernan Cubillos, the Chilean Foreign Minister, immediately suggested submitting the dispute to the mediation of a third party, but Argentina rejected the offer, insisting on bilateral negotiations. UP IN ARMS Meanwhile preparations for war continued on both sides. Military academies in Chile were closed and students sent south, ostensibly for "field training." The Argentine Education Ministry instructed teachers to give early end-of-year exams in view of a possible closure of schools. Both countries continued to bolster their armed forces along the length of their border. On November 7th, Argentina agreed to submit the dispute to mediation. Tensions flared again in December when, after eighteen hours, talks between the foreign ministers of Chile and Argentina to designate a mediator broke down without agreement. Though Chile accepted their proposal to have Pope John Paul II act as mediator, it refused to accept the Argentine demand to demarcate the boundary between the Atlantic and the Pacific through the Cape Horn islands, an act which would have placed the contested islands in the Atlantic, traditionally considered the domain of Argentina. Throughout December, Videla was under considerable pressure from his domestic military colleagues to demonstrate the worth of another mediation. Voices of dissension were heard throughout the month from the likes of General Osiris Villegas and retired Admiral Emilio Massera. Hardliners pressed for Chile to receive treatment similar to that given the "communists." At one point, Massera, expressing the sentiment of the Navy and considerable other sectors in the armed forces, was quoted as stating that there are those who, "wanted to negotiate what is not negotiable, and even to negotiate with those who do not want to talk." As tensions rose in mid-December, the U.S. State Department, eager to avert a war in the Southern Cone, announced its behind-the-scenes involvement, but gave no other specifications than having suggested the dispute be referred to the Organization of American States. Chile at the same time announced that it had invited an American military mission to observe its border with Argentina. Tensions peaked over the weekend of December 15th, after U.S. intelligence sources tipped off the Chileans that they suspected Argentine armed forces were preparing to occupy one of the disputed islands that weekend. Troops were put on full alert and a military confrontation seemed imminent. The situation eased somewhat after the Argentine Foreign Minister on December 16th, vowed to, "exhaust all efforts towards a peaceful settlement." It was only the intervention of the Pope in late December which halted any further deterioration of relations between Chile and Argentina. On December 22, Pope John Paul II announced that both countries had accepted his offer to mediate the Beagle Channel dispute. Antonio Cardinal Samore, a specialist on Latin American affairs, presently librarian and archivist at the Vatican, was designated as the Pope's envoy. Samore spent the last week of December and the first of January conferring with Chilean and Argentinean officials. Agreements were formally signed on January 8th, in Montevideo, Uruguay. Both countries agreed to resolve the dispute peaceably and to gradually demobilize troops and restore the military situation existing at the beginning of 1977. As yet no details of the mediation have been publicly disclosed. Reports have suggested that Argentina may be willing to accept a formula which gives Chile sovereignty over the three islands, but with limited territorial waters, provided that Argentina is given a sovereign corridor of access through the channel to Ushuaia. Nevertheless the outcome of the Beagle Channel dispute still remains up in the air. Hostilities have hardly subsided. Though both Pinochet and Videla favor a peaceful solution to the conflict, Videla remains under considerable pressure to go to war.
