Argentina and Paraguay are refusing to cooperate in the production of Oscar-winning director Kathryn Bigelow's latest project, a film focusing on a border region thought to be a center for terror financing.

Bigelow, whose movie The Hurt Locker won multiple Oscars this year, including best picture, wants to examine the area where Argentina, Paraguay and Brazil meet in a film tentatively titled Triple Frontier.

But the focus on the region has angered the tourism ministers of Argentina and Paraguay, who fear the movie could damage their countries' reputation with foreign visitors.

"We discussed this subject with Paraguay's tourism minister and the governor of Misiones (an Argentine border state)," said Argentine Tourism Minister Enrique Meyer.

"We all agreed that we were deeply indignant when we discovered that this project seeks to negatively portray this region shared by three South American countries," Meyer told AFP.

The border region has long been associated with trade in contraband items and the US government has also said it is a center for terror financing, a claim denied by Brazil, Paraguay and Argentina.