THE FALKLANDS DISPUTE: IMPLICATIONS FOR US RELATIONS WITH LATIN AMERICA AND WESTERN EUROPE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00225R000100270001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: December 21, 2016
• Document Release Date: July 11, 2008
• Sequence Number: 1
• Publication Date: June 1, 1982
• Content Type: REPORT

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Intelligence
Western Europe
The Falklands Dispute:
Implications for US Relations
With Latin America and
An Intelligence Assessment
MASTER ~IIE COPY
t3~ ~.OT GIVE OllT
0~ MA81( QM
State Dept. review
completed
Secret
AGA 82-10085
EUR 82-10056
Jerre 19$2
Co, ~ ~ 2
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Directorate of Secret
Intelligence
The Falklands Dispute:
Implications for US Relations
With Latin America and
Western Europe
Irdormation available as of 1 S June 1982
has been used in the preparation of this report.
This memorandum was prepared b
of the Office of African and Latin American Analysis
and b f the Falkland Islands
Working Group. Comments and queries are welcome
and may be directed to the Chief, South America
Division, ALA
This paper has been coordinated with the National
Intelligence Council and with the Directorate of
Operations
Secret
ALA 82-10085
EUR 82-/0056
June/982
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The Falklands Dispute: Implications
for US Relations With Latin America
and Western Europe
instability in Argentina leading to a leftist Peronist government.
Key Judgments The final resolution of the Falklands crisis will determine the extent and
duration of related damages to US ties with Latin America. The broadest
and most lasting impact would be caused by severe political and economic
Even if the crisis were to be resolved under conditions well short of that 25X1
worst case, the US decision to support the United Kingdom-and espe-
cially Washington's imposition of sanctions on Argentina-will leave the
US position in Latin America somewhat impaired. Relations with several
countries probably will be cool for a few years. Over time losses can be par-
tially or even substantially redressed. Much will depend on the efficacy of
US damage-limiting measures.
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The principal, abiding consequence of the crisis in both bilateral and
regional terms will be to reinforce factors that have progressively reduced
the once-great US influence in the region. The extent of deepening of that
gradual but persistent effect will vary from country to country and from
subregion to subregion. It will be more pronounced in South America than
in the Caribbean Basin, where the net effect on US interests will be minor.
25X1
The crisis will have less impact on Washington's relations with its
European Allies than with Latin America. The war is not the central
concern to continental NATO members that it is to many Latin American
states, and it is not viewed in Europe as a major indicator of overall US
policy toward NATO. Nevertheless, we believe the crisis could tend to
shape future responses to some important issues, such as the Alliance's role
in the out-of-area interests of member states.
Secret
ALA 82-10085
EUR 81-10056
Junel981
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The Falklands Dispute: Implications
for US Relations With Latin America
and Western Europe
The US stance in favor of the United Kingdom has
produced wide and strong resentment in Latin Amer-
ica. Intellectually, for some time Latin Americans
have recognized and grudgingly accepted the primacy
for the United States of its interests in Western
Europe over those in Latin America. The special
nature of the historical US bonds with the British
were also understood. But the dramatic and unequivo-
cal confirmation of the secondary place of Latin
America in US strategic concerns came as a severe
psychological shock to many Latin Americans
The force of that blow was intensified by its occurring
in the face of formal expressions of solidarity with
Argentina by the great majority of Latin American
governments. The perception of affront is only slightly
mitigated by the fact that the solidarity was evoked
by emotional and instinctive identification with Ar-
gentina as a fellow Latin American state and that
Latin rhetorical unity obscured extensive disagree-
ment with the original Argentine resort to force
The invocation of Latin American solidarity has
tapped the pervasive and persistent strain of anti-
Americanism in Latin American nationalism. Uneasi-
ness about the implications of the conflict for a
continent with many territorial disputes, uneasiness
over Buenos Aires's use of force, and a general dislike
for Argentina as a hemispheric actor have been
submerged at least temporarily in a wave of strident
criticism of US disregard of perceived Latin Ameri-
can interests.
Some Latin American leaders-particularly in Ven-
ezuela, Panama, and Peru-have called for revisions
(unspecified) of the Rio Treaty; others, striking an old
theme, have demanded US exclusion from the Orga-
nization of American States (OAS) or the creation of
some other purely Latin American political organiza-
tion. Despite the high quotient of emotion in many of
these instinctive reactions and the strong likelihood
that extravagant impulses will give way to more sober
and realistic appreciations, US relations with certain
South American countries will never again be quite
the same. Moreover, the nature and operation of the
inter-American system and its institutions will be
affected; the continuing value of the OAS and the Rio
Treaty to Latin states will deter efforts toward radical
changes. Over the longer term, a third area of concern
to the United States-peace among states of the
region~ould be jeopardized.
In economic terms, the crisis is unlikely to have much
impact on US interests~ther than in Argentina. 25X1
Once emotions cool, the region's need for foreign
funds and skills will cause Latin American leaders to
resume a .more pragmatic approach- to Washington.
US willingness to respond to economic concerns in
such areas as trade, access to capital, debt service
accommodations, policing of transnationals, and tech-
nology transfer should hasten the regaining of lost
ground. But the decades-old trend toward greater
political, economic, and military independence from
the United States will continue regardless of US 25X1
actions.
25X1
The Soviet Union, which sees any Latin American
conflict with the United States as useful, is attempt-
ing to exploit the new opportunities to expand its
influence. Nevertheless, embedded Latin suspicions of
Soviet purposes, corresponding fears of subversion,
and Moscow's inability to play a major role in Latin
American economic development-the central prob-
lem for all states of the region-will limit Soviet 25X1
gains. Soviet weapons may be more attractive to some
rearming South American countries, but attempts to
gain political advantage from arms sales will be
resisted. 25X1
The Cubans and Nicaraguans will continue their
rhetorical support for Argentina in hopes of reducing
US influence in the region and undercutting US
policy toward Central America. The transparent cyni-
cism of their position will tend to reduce their degree
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The impact on US bilateral relations in the hemi-
sphere will range from significant, long-term damage
in the case of Argentina to little noticeable effect in
Mexico, Central America, and the Caribbea
With South America
South American reaction to the US position in the
crisis falls into three broad categories:
? Those states adopting a hard, critical stance toward
Washington-Argentina, Venezuela, Peru, and, to a
much lesser extent, Bolivia.
? Those countries taking a middle position, sympa-
thizing with Argentina but trying to avoid alienat-
ing the United States-Brazil, Ecuador, Uruguay,
and Paraguay.
? Those taking a "soft" approach, opposing Argentine
actions on juridical and strategic grounds-Colom-
bia and Chile
Among those countries taking a strong stand in the
crisis, the United States will suffer significant, long-
term damage to its relations with Argentina and with
the military in Peru. Historically, US relations with
Argentina have never been close; now, Buenos Aires
will be hostile for years to come. US firms in Argenti-
na are likely to face tougher regulations and a loss of
investment opportunities. In general, the Argentines
probably will try to cut back imports from the United
States-which totaled $2 billion in 1981.
Underlying political and economic problems that ex-
isted before the invasion still persist and will now
reemerge. Civilian gruups are likely to blame the
junta for the military failure and join the call for a
rapid return to elected government. We believe re-
gime leaders will try to ward off these calls in two
ways. First, they will maintain an aggressive posture
toward the British and pledge to press Argentine
claims to the Falklands. Second, they will move
toward transition to civilian rule-the anticipated
political party statute due in late June will be a
crucial first step in the process. Civilian leaders would
be likely to accept a transition period of military
rule-albeit with their participation-to assure a
smooth transfer.
The motives for Venezuela's strong pro-Argentine
stand are complex and linked to a variety of national-
istic and domestic political issues. The crisis will
produce some short-term negative aspects in US-
Venezuelan relations; in public Caracas will criticize
the United States and try to distance itself from US
policies. But because both countries have parallel
economic and security interests we believe Caracas
will become more cooperative in time, though bicker-
ing and footdragging probably will characterize its
private dealings with Washington over the short term.
In Peru, the sentiment of military leaders and wide-
spread popular support for Argentina are dragging
President Belaunde into an increasingly uncomfort-
able pro-Buenos Aires position. One recent poll, for
example, shows that over 90 percent of the public
strongly backed Argentina. Lima's stand in the con-
flict relates directly to its dispute with Chile; the US
position is a secondary consideration. Most of Peru's
civilian leaders, and particularly President Belaunde,
want friendly ties with Washington. US political and
economic interests should suffer no serious or endur-
ing damage.
The Peruvian high command, however, reportedly is
convinced that Washington is an unreliable partner.
Any prospects of weaning it away from a heavy
dependence on Soviet military equipment have been
dashed for the foreseeable future. Bolivia, with Ar-
gentine largess a thing of the past, will continue to
push for improved relations and economic assistance
from Washington
US relations with those countries adopting a middle
position should not be significantly affected. Brazil,
more than any country in the region, has a strong
appreciation of its global political and economic inter-
ests and will strive to avoid damaging its ties with
either the United States or the United Kingdom.
Nevertheless, Brasilia values its improved relations
with Buenos Aires and did not want to lag behind its
Spanish-speaking, neighbors in offering vocal and
material support.
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Brazil's chief concern is post-
crisis costa i ity in Argentina that might bring a
leftist-Peronist regime to power. The Brazilians also
worry that Argentina will begin new provocations
against the Chileans. We believe Brazil will, there-
fore, continue its delicate balancing act, trying to
avoid the wrath of resurgent Argentine nationalism
and, at the same time, protect its broader economic
and security interests. Ecuador, Uruguay, and Para-
guay were anxious to stay clear of the conflict and the
United States will neither gain nor lose in these
countries.
US-Colombian relations should not be adversely af-
fected by the dispute. Despite considerable public
sympathy for Argentina, the Colombian Government,
with an eye to Nicaragua's claim to Colombian
islands, maintained a highly principled, legal position
in the crisis. Bogota's calls for the withdrawal of
Argentine troops and its attempt to push a moderate
resolution in the OAS dovetailed with US policy.
President-elect Belisario Betancur is likely to follow a
more nationalistic policy, however, and for this rea-
son, Bogota probably will be more independent of the
United States in the Caribbean Basin. Chile, con-
cerned that it will be the next victim of Argentine
aggression, is pushing for a resumption of military
assistance and closer ties with the United States.
With Mexico, Central America, and the Caribbean
For reasons of individual self-interest, but partly
fortuitously, this crisis will least affect relations with
countries geographically closest to the United States.
Indeed, for those English-speaking states that are
already tentatively well pleased with recent US atten-
tion to the Caribbean, the dispute augurs better ties.
Guyana, concerned by the prospect of a Venezuelan
move to reclaim the Essequibo, has broken ranks with
its socialist allies and has joined the English-speaking
states on this issue.
The alignment of Cuba, Nicaragua, and Grenada
with Argentina injects no important new ingredient in
the already sour relations these nations have with
Washington.
Central Americans, anchored by their own crisis to
their positions with Washington, will-for practical
purposes-be unaffected by events in the South At-
lantic. The dependence of El Salvador and Costa
Rica on the United States allows for little substantive
change in the relationship. Despite the bitter reaction
of the pro-Argentine Commander in Chief, Alvarez,
the case of Honduras is similar. Bilateral relations are
subject at least to short-term erosion, however, if
increased US military and economic assistance is not
forthcoming. Guatemala has found Argentina a more
reliable ally than the United States in recent years,
but this appears likely to be offset by the desire of 25X1
close ties to Washington.
25X1
Panama's strong support for Buenos Aires during the
crisis is related directly to the Canal Treaty issue.
More than any other regional nation, Panama has
fervently and effectively used Latin solidarity on this
issue and its related territorial question. Panama
anticipates the need to exploit it again as the Canal
Treaty implementation process draws on and differ-
ences over treaty interpretation arise
25X1
Neither will the relationship between Mexico and the
United States feel any noticeable effect from the
crisis. Mexico took a low profile in the dispute.
Moreover, Mexican leaders have a realistic view of
their country's highly complex interdependence with
the United States, one currently highlighted by seri-
ous economic difficulties.
Security and Regional Cooperation
Even before the strife in the Falklands, it was increas-
ingly difficult for Washington to mobilize the hemi-
sphere against the threat from international Commu-
nism. Most South American governments, though
concerned about Cuba and Nicaragua, see the strug-
gle in Central America as primarily a US problem.
Moreover, they fear that US policy has the effect of
introducing East-West tensions into the region. Last
year, for example, this kind of concern and the fear 25X1
that the United States would take direct action in
Central America prompted the Venezuelan Foreign
Minister to discuss with his counterparts in Brazil,
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Argentina, and Mexico the formulation of a unified
Latin American foreign policy to sensitize Washing-
ton to the regions' concerns. In part because of
Brazilian and Mexican reluctance, the ministers were
unable to reach a consensus, but their efforts under-
scored Latin American uneasiness over the direction
of US policy in the Caribbean
This does not imply that the Latin Americans are
indifferent to the threat posed by Communism or
that, in case of naked aggression, the Rio Treaty
could not be invoked. It does suggest, however, that
any effort to trigger the collective security mechanism
against Cuba or Nicaragua will meet strong resis-
tance for some time to come
In the Caribbean Basin
In Central America the United States is likely, as a
result of the Falklands crisis, to be much more on its
own. In spite of Venezuela's strong support for Argen-
tina and intense criticism of the United States, Cara-
cas's enduring geopolitical interests in the Caribbean
Basin as a whole-as well as its desire to redress
losses it has suffered with pro-UK Caribbean states-
will leave its policy toward the subregion basically
intact and parallel to Washington's. Caracas will,
therefore, continue its assistance programs in the
area. But the Venezuelans, already increasingly con-
cerned about the political costs of cooperating with
Washington, will want even less public identification
with US activities there. In private, footdragging and
bickering will characterize Venezuelan dealings with
US officials on a variety of Caribbean Basin issues.
This will be evident in the negotiations on the Carib-
bean Basin Initiative. Caracas, for example, declined
to attend a meeting on the Caribbean Basin scheduled
to be held in Paris because of European sanctions
against Argentina. The fallout of the Falklands crisis
will also complicate US efforts to involve other do-
nors, such as Brazil.
Reduced resources will substantially limit Argentina's
role in Central America. Moreover, Buenos Aires's
bitterness toward the United States for its position in
the Falklands' crisis could lead Argentina to pursue
policies that diverge from our own. Buenos Aires,
however, probably will not make a decision on its
future course in Central America until the domestic
political situation sorts itself out. Moreover, the Ar-
gentines may reason that Washington still might
soften the British position, in hopes of recouping lost
ground in Latin America.
In the OAS
As a vehicle for regional consultation and coordinated
action, the already ineffectual OAS has been further
weakened by the Falklands crisis. Nevertheless, we
believe the calls by some Latin American officials for
the creation of a Latin-only political organization-an
OAS without the United States and perhaps the
English-speaking countries of the Caribbean-will be
unsuccessful. The OAS serves some important Latin
American purposes, such as a forum for engaging
Washington. The historic difficulty in forming a
cohesive and effective Latin American political entity
further suggests that radical action will be avoided.
Similarly, far-reaching revision of the Rio Treaty is
not likely, although Latin American governments will
probably discuss this possibility over the coming
months.
The Falklands issue sharply aggravated the long-
standing differences between the English-speaking
Caribbean members of the OAS and most of the
Latin Americans. The mutual distrust illustrated by
their opposite stances on the Falklands will probably
grow and debilitate the OAS further. Buenos Aires's
traditionally limited cooperation with the United
States in the OAS is certain to reappear, adding
further to the decline of the institution. Nonetheless,
emotional demands for the restructuring or replace-
ment of the OAS will be resisted by cooler heads in
Brazil, Colombia, Chile-and possibly even Venezu-
ela, which, may be
d h h b 1 d
t
t
s ear ier vanguar .
i
having secon t oug is a ou
position in favor of far-reaching changes in the inter- 25X1
American system.
Many Latin American leaders-and especially the
Brazilians-have serious doubts about the viability of
Latin-only regional organizations, particularly for po-
litical and security purposes. Those that exist-and
they are essentially economic groupings-have not
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functioned well. As was demonstrated by the failure
in 1981 of Venezuelan efforts to orchestrate a com-
mon Latin American foreign policy, attempts to forge
political unity have foundered on mutual suspicions
and the incompatibility of the interests of individual
states. Superficial or temporary identity of views has
tended to dissipate where fundamental divergences of
interests have come into play. The fate of the so-called
Southern Cone alliance is a subregional case in point.
Only on US-oriented issues-and exclusively econom-
ic ones-have the Latin Americans been able to
achieve unanimity. Despite the many serious short-
comings of the OAS, we believe most Latin govern-
ments ultimately will judge that it is the one judicial
body in which they can collectively pressure or re-
strain Washington and take it to task for its actions.
Considerations of this kind also will influence the
Latin American approach to the Rio Treaty, the
collective security instrument of the inter-American
system. The Treaty is important to many of its Latin
American members as a safeguard against intra-
hemisphere conflicts. Moreover, it embodies the US
commitment to the strategic defense of Latin Amer-
ica against the Soviet threat. We judge that these
basic concerns make it doubtful that the Treaty will
be jettisoned or radically revised
Military Sales and Training
The crisis will accelerate the erosion of military
collaboration with the United States in a number of
areas. Over the past two decades, Latin American
efforts to diversify military purchases and training
were part of a broader drive to achieve a greater
measure of political and economic autonomy from
Washington. US policies on arms control, human
rights, and other issues during this period restricted
arms sales and suspended military assistance. This
convinced many military establishments that the
United States was not a reliable arms supplier and
security collaborator
Western Europe and Israel became the sources for
major weapons systems and training; only Peru pur-
chased heavily from the USSR. In addition to buying
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abroad, Brazil and Argentina expanded their domes-
tic arms industries. The Latin Americans had mixed
results with their European equipment in terms of
cost, reliability, and provision of spare parts. More- 25X1
over, Argentina and Chile discovered that Western
Europe-like the United States-would hold up arms
sales because of the issue of human rights abuses.
The advent of a new administration in Washington 25X1
concerned about regional security and the threat from
Communist subversion sparked the interest of several
countries in renewing weapons purchases and reestab-
lishing some military ties. Argentina, in particular,
hoped for closer military collaboration and planned to
buy training slots and advanced aircraft. Brazil,
though not interested in returning to the close military
ties that existed in the 1950s and 1960s, wanted to
upgrade the level of military contacts and step up
training. 25X1 25X1
It is still too early to assess the net impact of the crisis
on US military sales.
(Chile, fearing more 25X1
problems with Buenos Aires over the Beagle Channel,
is pushing to buy US equipment.
25X1
Argentina, in contrast, will return to the European
and Israeli markets for weapons and training and, to
the extent that its resources permit, will step up joint 25X1
ventures with German firms for construction of mayor
systems in Argentina. 25X1
The Brazilian high command will continue to rebuff
any notion of an expanded leadership role for the
United States in hemispheric defense. Brazilian lack
of interest in a multilateral arrangement in the South
Atlantic will be reinforced by the crisis; Argentina's
association with the United States in such an under-
taking is out of the question. Brazilian interest in US
training will remain, however, and over time Brazil 25X1
may be receptive to upgrading military contacts.
Should a radical, populist regime come to power in
Argentina. Brasilia would want to consult
with Washington at a high level.
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Washington's sanctions against Argentina-accord-
ing to the US Embassy in Lima-convinced key
Peruvian military leaders that the United States is
unreliable, both as a partner and as a source of
weapons. Thus, Peru will continue to rely heavily on
the USSR for major aircraft and ground equipment,
which it now receives on concessionary terms.
Threats to Regional Peace
Over the medium-to-long term, the Falkland crisis is
likely to cause a significant increase in regional
tensions over territorial disputes, arms buildups, and
nuclear programs. The dispute between Chile and
Argentina over the Beagle Channel will be the most
potentially dangerous flashpoint. Though Santiago
has continually professed its neutrality in the Falk-
land conflict, the Argentines remain distrustful.
Some Chileans are convinced that Argentina will turn
next on Santiago. In part this may be a ploy to
convince the United States to resume military sales.
Since the Argentine invasion of the Falklands, how-
ever, we believe Chilean leaders are convinced that
restraint no longer prevails in Buenos Aires and they
expect stepped-up Argentine provocations over the
Beagle channel dispute.
The mutual suspicions and antipathies involved in this
dispute between Argentina and Chile-and the likeli-
hood that, should strife occur, Peru, with Irredentist
aspirations toward Chilean territory, could also be
drawn in-typify the potential for armed clashes over
a dozen or so other territorial quarrels in the region.
The Falklands crisis also has focused attention on
Venezuela's longstanding claim to Guyana's Esse-
quibo region. Bilateral talks between Caracas and
Georgetown may begin in the latter part of June, and
there now seems no immediate danger of Venezuelan
military action. In light of the Falklands case, howev-
er, Venezuela will stress to Guyana that it is not
prepared for prolonged, inconclusive negotiations. Ca-
racas probably will underscore this warning with
occasional saber rattling and a continued buildup of
its forces in the border area.
cannot be relied upon.
These territorial conflicts and the likelihood that the
Falklands crisis will prompt a new round of major
military expenditures underscore the dangers of an
arms buildup in the region. Even before the dispute,
several South American countries were either plan-
ning for or were in the midst of major military
modernization programs. The fighting in the Falk-
lands is being carefully assessed by military planners
and strategists. So far, their reaction-though tenta-
tive and essentially impulsive-stresses the need to
acquire new and more sophisticated weapons; acceler-
ate the diversification of weapons suppliers; and, in
the case of Brazil and Argentina, expand domestic
arms industries. Brazilians, in particular, believe the
crisis will be a boon to their already burgeoning arms
industry. They reason that neighboring countries as
well as many other Third World states will be con-
vinced that the United States and Western Europe
Another result of the conflict in the South Atlantic
could be an acceleration of the nuclear programs in
Argentina and Brazil. Over the past several years,
most observers generally assumed that national pres-
tige and energy needs motivated Argentina's nuclear
programs-with the security issue ranking a distant
third. The Falklands conflict, however, could raise
security to a more prominent place in Buenos Aires's
nuclear planning, although there is no firm evidence
that this has happened so far.
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Strong anti-Communist and antileftist sentiment will 25X
persist in Argentine society as a whole and in the
armed forces in particular. Thus, Soviet hopes of
making sales of major weapons systems are unlikely 25X1
Prospects for Communist Gains
The crisis has allowed the Soviets to make a net
advance in a short-term propaganda sense, principally
in Argentina. Soviet gains may not be long lasting,
however. Most Latin Americans are alarmed by the
prospects of closer ties between Moscow and Buenos
Aires, and Soviet aggressiveness in exploiting the
situation can turn to Soviet disadvantage. Brazilian
and Venezuelan officials, for example, cite this con-
cern as a major reason for criticizing US policy. Even
Argentine leaders must view the Soviet position in the
dispute as cynical and opportunistic
Moreover, there are significant constraints on an
expansion of Soviet-Argentine ties. Moscow almost
certainly hopes that the crisis will lead to a more
favorable bilateral economic relationship but it offers
few imports attractive to Argentina. According to
Soviet figures for 1981, the USSR bought $3.3 billion
worth of goods from Argentina-mostly grain and
meat-but sold to Argentina only $42.5 million in
machinery and nuclear supplies.
Perhaps more important, the Communist countries
have scant prospect of replacing the United States
and Western Europe as suppliers of financial capital
to Latin America. Current Communist economic aid
flows to Latin America are on the order of $411
million per year. In addition, the USSR is finding it
increasingly difficult to meet the financial needs of its
own client states. By contrast, US and Western
medium- and long-term capital flows to the region ran
about $24 billion in 1980 and continue to grow
Over time, the example offered by Peru, concern over
the reliability of Western suppliers, and economic
problems could make the Argentines more susceptible
to Soviet blandishments. Should Argentina establish 25X1
closer ties with Moscow and purchase substantial
amounts of weapons, Brazil-and to a lesser extent
Venezuela-would want to consult regularly and
closely with Washington on security matters. In par-
ticular, we believe Brasilia would be interested in
exploring the question of South Atlantic defense and
broader issues relating to the maintenance of regional
peace.
The caution with which Cuba first approached the
crisis reflected the Castro regime's reluctance to cast
its lot with an ideologically unacceptable administra-
tion in Buenos Aires, especially one that was likely to
emerge a loser. This initial ambivalence quickly gave
way to strong support once Havana detected rising 25X1
pro-Argentine sentiment in other Latin American
capitals. Sensing an opportunity to weaken the OAS
and reduce US influence in Latin America, the
Cubans tried to broaden regional participation in the
struggle and prolong it as a means of polarizing the
hemisphere. Havana saw this role as a way to insinu-
ate itself back into the mainstream of regional affairs
after years of isolation, and to create conditions within
Argentina that later could be exploited by Cuba's
leftist allies there.
25X1
The Nicaraguans more instinctively supported Argen-
tina, with none of the hesitance showed by the
Cubans. Managua thinks it has already benefited
from the South Atlantic crisis. Seeing the United
States divided from Latin America on the issue,
Nicaragua believes Washington will lose ground in
the hemisphere for its Central American policy.
Nonetheless, the transparently cynical nature of Cu-
ba's and Nicaragua's alliance with the rightwing
regime in Argentina will reduce severely the degree of
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success they will have. Those countries that have
become concerned about Cuban and Soviet activities
in the Caribbean Basin over the past three years will
remain so.
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The Impact in Western Europe
The Anglo-Argentine war in the Falkland Islands will
have less impact on Washington's relations with its
European Allies than with Latin America. The crisis
has not been the central concern to continental
NATO members that it has been to many Latin
American states, and it has not been viewed in Europe
as a major indicator of overall US policy toward
NATO.
In a sense, the impact of the Falklands on US-West
European relations has been limited by the strength of
US support for the British. A neutral or pro-Argen-
tine US stance would have shaken the conviction of
the Allies that they could count on Washington to
support West European interests outside the NATO
area. While the Allies have been reassured by US
support for London, they have tended to downplay it
publicly, in part because their own support for the
United Kingdom has been more conditional and
measured than Washington's. At the same time, the
West Europeans have attempted to minimize damage
to their own relations with Latin American states.
Nevertheless, we believe the crisis will affect some
important Alliance issues. In Britain, it will rekindle a
smoldering domestic debate on future military roles
that will have a major impact on Alliance military
strategy and UK-West European relations. In addi-
tion, it will sharpen NATO's debate about the Alli-
ance's role in the out-of-area interests of member
states. The war's aftermath probably will also focus
the Allies once more on the differences between their
interests in Latin America, on the one hand, and US
policy on the other.
The UK military victory in the Falklands will boost
the soaring political fortunes of Prime Minister Mar-
garet Thatcher and her Conservative Party. The press
is already speculating that Thatcher may call an early
election to take advantage of her current strong
standing in the polls. Her likely victory in this case
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would ensure strong UK support for US security
policies across the board, in particular for NATO's
INF modernization effort.
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The Falklands war may also affect the ongoing UK
review of its various military roles. Britain presently
maintains a strategic nuclear role, a large convention-
al contribution to the conventional defense of central
Europe, a surface fleet, and mobile deployment forces
meant to enable London to respond to an overseas
crisis (such as the Falklands war), as well as a home
defense force. 25X1
By last year, it had become increasingly clear that
London could not afford indefinitely to fund all these
forces at their present or estimated future strength.
The 1981 defense review, therefore, resulted in mar-
ginal cuts in the British Army of the Rhine (BAOR),
mainstay of the UK conventional presence in Central
Europe, and in substantial planned reductions in the25X1
UK surface fleet. The nuclear deterrent was left
untouched. While Defense Minister Nott stated after
the review that the United Kingdom would continue25X1
to perform all military roles, although perhaps at a
reduced level, comments by some Ministry of Defense
experts indicate that the government knows this may
not be possible.
During the crisis, some Allied spokesmen-most
prominently West German Foreign Minister
Genscher-worried that the strain of the Falklands on
UK forces would reduce Britain's ability to carry out
its NATO tasks. In fact, the redeployment of the 25X1
British fleet did keep the United Kingdom from
conducting routine North Atlantic patrols.
A swift return of the fleet to the North Atlantic after
a UK victory in the Falklands would permit the 25X1
British to resume their normal NATO maritime
patrol functions. The Argentines did not succeed in
sinking enough British ships to affect that role signifi-
cantly. On the other hand, if a substantial part of the
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fleet stays in the Falklands region for several months
to maintain British control, the concerns of the
NATO Allies may intensify
Those in Britain supporting an increase in the surface
fleet will point out that the United Kingdom needs to
be able to satisfy its NATO maritime responsibilities
as well as to move forces to other parts of the world.
They will argue that Britain's logistic and operational
problems in the South Atlantic demonstrate the need
for greater conventional maritime capability. Oppo-
nents will stress that task force losses demonstrate the
vulnerability of surface ships in modern warfare.
Any decision to expand the fleet significantly could
come only at the expense of one of Britain's other
roles. Since Thatcher seems determined to stick to the
controversial Trident purchase, the UK presence in
Europe appears most vulnerable. The British Army of
the Rhine is a logical target of those who argue that
Britain can be more effective with global interdiction
forces than with an army earmarked for the defense
of West Germany
A move to reduce significantly the British presence in
Europe would be poorly received in other Allied
capitals, particularly in Bonn. The West Germans
almost certainly would attempt to convince Washing-
ton to press the British Government to maintain its
continental presence. They would also seek assurances
that the United States would not follow the British
example. Other Allies might even ask the United
States to pick up some of the slack in NATO's
conventional defenses if the United Kingdom reduces
its Central European commitment.
The British Government would anticipate adverse
Allied reaction to any cut in its European commit-
ment, and probably would delay such a decision
initially by expanding overall defense expenditures,
even at the cost of a larger budget deficit. Over the
next few years, however, pressure for cuts in Britain's
European presence are likely to build and to receive a
sympathetic hearing from aThatcher-led government.
The "Out-of-Area" Question
The war in the Falklands has significant implications
for the ongoing NATO debate over the Alliance's role
in supporting the global interests of member states.
During this crisis, there was no discussion of the
provision of military aid by NATO, as an alliance, to
the British. Nor did any NATO member offer to
provide the military support necessary to take up the
slack created by the transfer of the British fleet from
the North Atlantic to the Falklands area.
A similar pattern could be seen in future Alliance 25X1
reactions to US transfer of forces to such possible
troublespots as the Persian Gulf. NATO members
have shown no willingness to expand the Alliance's
terms of reference to institutionalize protection of
Western interests outside the North Atlantic area.
Similarly, chances are slim that the Allies will agree
to earmark forces to replace any US troops or equip-
ment sent from Europe to another area, especially if 25X1
the West Europeans would be expected to share the
cost
On the other hand, the United States can expect
significant ad hoc and unilateral support for oper-
ations in the Persian Gulf and elsewhere. US support
for the United Kingdom in the Falklands crisis has
significantly improved the already favorable prospects
for British cooperation with US efforts worldwide.
London probably would grant Washington access and
base rights, as long as the British perceived the US
move as congruent with their interests. The extent to
which the British would provide direct military help
would depend on the location of the crisis, Britain's
stakes in it, and the available force at the govern-
ment's disposal
France probably can also be counted on to help
certain US projects, again assuming that Paris is in
agreement with the direction of particular US poli-
cies. The Mitterrand government has already shown
itself willing to cooperate with US deployments to the
Persian Gulf and seems willing as well to take the lead
in protecting Western interests in Francophone Afri-
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No other Ally is capable of much direct military
support, unless Belgium decides to reactivate its Zaire
policy in the event of renewed instability in that area.
West Germany may eventually expand its own mari-
time interdiction capability, but for the foreseeable
future will be able to play only a limited role in the
projection of Western forces outside the NATO area.
The Allies are acutely aware of the danger that the
Falklands crisis poses to US-Latin American and
West European-Latin American relations. From the
earliest days of the crisis, the Allies tried to minimize
damage to both sets of relations, a process that will
accelerate now that the war is virtually over. This is
an urgent concern to many Allies, particularly West
Germany and Italy, because of the perceived danger
that the USSR and Cuba could benefit from strained
relations between NATO members and Latin Amer-
ica, and because the Allies hope to expand once
promising economic and political ties to countries in
the region.
ers.
The war and its aftermath probably will exacerbate
some US-West European differences regarding El
Salvador and other regional problems. France, West
Germany, and other Allies, perceiving a diminution in
Washington's power to influence the El Salvador
problem and the evolution of the Nicaraguan revolu-
tion, will redouble their efforts to offer themselves as
apolitical and economic alternative to the superpow-
On the other hand, the Falklands war has done little
to improve West European-Latin American relations.
EC sanctions against Argentina will not be quickly
forgotten, and the automatic NATO political support
for the United Kingdom in the Falklands war will
make it more difficult for West Europeans to present
themselves as having independent policies toward the
region. This situation may, in fact, make some Allies
even more determined to demonstrate independence
from the United States in future relations with Latin
America.
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