Falklands 30 - Ban on ships flying the Falklands Islands flag, Dec 2011

A provocative decision by a powerful South American trading bloc to ban boats with a Falkland Islands flag from docking at ports will only "damage" the local economy, the Foreign Office has said. By Andrew Hough of the Daily Telegraph 21 December 2011.

In a new row with Britain, the Mercosur bloc, which includes Brazil, Argentina and Uruguay, agreed on Tuesday to close ports throughout the region to ships flying the flag of the disputed Islands.

The presidents of the countries agreed ships flying the Falklands flag "should not dock in Mercosur ports, and if that were to happen, they should not be accepted in another Mercosur port".

A copy of the agreement also said member countries would adopt "all measures that can be put in place to impede the entry to its ports of ships that fly the illegal flag of the Malvinas Islands".

The dispute, which has created a fresh diplomatic headache for the government, which controls the islands, involves a vast area of potentially mineral-rich South Atlantic waters.

On Wednesday, the Foreign Office said it was "very concerned" by the decision, announced at the end of a summit in Montevideo, the Uruguayan capital.

"We are very concerned by this latest Argentine attempt to isolate the Falkland Islands people and damage their livelihoods, for which there is no justification," a spokeswoman said.

"It is not immediately clear what practical impact, if any, this statement will have. We are discussing this urgently with countries in the region.

"But no one should doubt our determination to protect the Falkland Islanders' right to determine their own political future."

The Mercosur decision is the latest in a series by Latin American regional bodies designed to show solidarity with Argentina, which calls the islands Las Malvinas in the Spanish-speaking world.

The South Atlantic islands are a powerful Argentine national symbol and the government often reiterates its sovereignty claim over the South Atlantic archipelago almost 30 years after Argentina and Britain went to war over it.

Britain has in turn protested to Argentina over its interception of British-licensed fishing boats in disputed waters near the Falkland Islands.

Earlier on Wednesday, Argentina's President Cristina Kirchner, who took over the presidency of the trade bloc, thanked her fellow presidents for their "immense solidarity" in her country's dispute with Britain.

"But you should know that when you are signing something on the Malvinas in favour of Argentina you are also doing it in your own defence," she said in a speech to the summit.

"Malvinas is not an Argentine cause, it is a global cause, because in the Malvinas they are taking our oil and fishing resources.

"And when there is need for more resources those who are strong are going to look for them wherever and however they can."

She added: "The United Kingdom is a permanent member of the UN security council yet they do not respect a single, not a single resolution.

"We are not asking them to come here and recognise that the Malvinas are Argentinian but what we are saying is for them to comply with the United Nations, sit down and talk, talk, talk."

She added: "Nor should they come at us with the excuse of the dictatorship or the war from 30 years ago because they were the ones who would speak with the dictators."

It came after Jose Mujica, the Uruguayan president, announced last week that his country would bar Falklands ships from Uruguayan ports.

The announcement, which is understood to have caused surprise in Whitehall, prompted the Foreign Office to summon Uruguay's ambassador in London to express its concern.

While Argentina and Britain have renewed diplomatic ties since a brief but bloody war in 1982, the South American country claims the Falklands as its own territory.

Britain has repeatedly said that its sovereignty over the three groups of islands, whose inhabitants are overwhelmingly of British descent, is not up for negotiation.

The dispute has escalated again recently as British companies have begun exploring for oil in waters surrounding the islands, which lie 400 nautical miles from the Argentine coast.

The Kirchner administration last year announced that ships sailing to or from the Falkland, South Georgia and South Sandwich Islands required permission if they wanted to travel through Argentine waters.

The Uruguayan president said solidarity among South America's neighbours was key to his country's foreign policy. ''For the moment, this means accepting that this territory is a colonial British position in our America," he said.

Mr Mujica said British-flagged civilian ships that may supply the islands would be allowed to use its ports, but not military vessels.

British navy ships bound for the Falkland Islands would not be allowed to port in Uruguay "for reasons of solidarity with Argentina", he added.

He also said his country would never impose a maritime blockade of the British overseas territory.

"We don't have anything against England, but we've got a lot in favour of our neighbour," he said.

Roger Spink, president of the Falklands Chamber of Commerce, said they were a small community and felt increasingly under blockade.

''If we were Palestine, the European Union would be up in arms," he told the BBC.

The bloc also agreed to raise tariffs on imports to shield their industries from a flood of cheaper imported goods stemming from the global economic crisis. They also approved a Palestinian free trade.

Mercosur also includes Paraguay, which is landlocked, and counts Bolivia, Chile, Colombia, Peru and Ecuador associate members. Venezuela is currently seeking membership in the group.

South American countries have been growing at fast rates in recent years but their expansion could be reined due to the global economic slowdown.