Brazil and Argentina are in talks to work out the details of a contract that will see the Brazilian defense industry recondition missiles in the Argentine armed forces' inventory.

Argentina has been exploring ways of modernizing its armed forces despite budgetary constraints as it struggles to allocate funds for what experts say will be a massive long-term program requiring huge investment.

Modernization of Argentine armed forces was put on hold after Argentina's defeat at the hands of Britain in the 74-day war over the Falkland Islands in 1982. Argentina's failed attempt to seize the islands led to a major upheaval that ousted the military from power and made way for democratic rule.

However, many years of economic dislocation took a toll on successive elected governments, a challenge that confronts President Cristina Fernandez de Kirchner before the Oct. 23 presidential election.

Brazilian participation in the Argentine armed forces' modernization is seen by military analysts as a compromise solution for a cash-strapped military that has received only a fraction of funds it has requested over the years.

Brazilian Defense Minister Celso Amorim visited Buenos Aires for talks with Argentine counterpart Arturo Puricelli to build on discussions earlier and also to promote military collaboration within the framework of the Union of South American Nations.

The 3-year-old Unasur has been seeking to raise its profile as a defense pact with the authority to have a say in regional military and security issues and ties between member countries and the rest of the world. Unasur members are Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay and Venezuela. Mexico and Panama are observers in the group that seeks to evolve as a cross between the European Union and NATO.

Amorim said current discussions centered on Brazilian technology being adapted to recondition an unspecified number of missiles bought by Argentina from various sources.

Brazil is also interested in seeking Argentine help with its aim of developing its own and a regional space program. The government is investing billions into reviving a military manufacturing industry that became dormant after Brazil shed military dictatorship that had ruled the country from March 31, 1964 to March 15, 1985.

Argentine Defense Minister Arturo Puricelli recently proposed the creation of a South American Space Agency within Unasur's framework modeled after the European Space Agency with a nod to NASA.

The timing of the discussions is significant for Brazil, which marks Wednesday as the anniversary of the country's independence from the Kingdom of Portugal in 1822.

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