Argentina is toughening restrictions on imports as part of a government strategy that aims to reduce a drain on foreign currency earnings and stimulate local manufacturing.

No one seems quite sure if the plan will work. Argentine President Cristina Fernandez de Kirchner has angered the country's import businesses with curbs that critics say are ill-conceived. Fernandez has also upset Latin American neighbors who say the measures contravene terms of the Mercosur regional trade pact.

Mercosur partners also say that Argentina's restrictive measures may be undermining talks with the European Union over a free trade accord that will open European markets to Latin American agricultural and livestock produce, natural resources and raw materials as well as manufactures.

Restrictive trade policies, what critics call overregulation and the burden of bureaucracy were seen behind falling foreign investments in the country.

At least 100 products are likely to see increased import levies, Argentine media reported. Included in the last are consumer, intermediate and capital goods, some of which have found markets in Latin America because of the economic slowdown in Europe.

An Argentine government team led by Industry and Production Minister Debora Giorgi is expected to announce new levies.

Argentine trade policies have been criticized by Mercosur members and other neighboring countries, including Brazil, Chile, Peru and Mexico, as well as the European Union and the United States.

The latest round of Latin American talks in Brussels on a draft trade accord got off to an uncertain start Monday because of positions adopted by Argentina, which is coordinating the discussions.

Last month, senior Argentine officials provoked controversy after reports they pressured Argentine importers to find substitutes for current imports from Britain. Argentina wants Britain to abandon its sovereignty over the Falkland Islands in the South Atlantic, which it claims as its own.

Military-ruled Argentina invaded the islands in 1982 but was repulsed by Britain in a 74-day conflict. The war cost the lives of 649 Argentine troops, 255 British troops and three Falkland Islanders.

Argentina under civilian rule revived the sovereignty issue. Fernandez has taken her claim to international organizations, arguing British rule over the South Atlantic islands is a vestige of colonialism.

The diplomatic escalation has coincided with United Kingdom-backed exploration for oil in the Falklands waters.

Argentina is increasingly combining its trade policies with measures to restrict trade prospects for the Falklands. Buenos Aires is in talks with Chile and Uruguay to further limit contact with the British territory.

Chilean Ambassador in Buenos Aires Adolfo Zaldivar is reportedly seeking consultations to convey Chilean business concerns over the curbs.