SINGAPORE and Chile are 'kindred spirits', sharing the same outlook on many issues especially on free trade.

Both are members of the Asia-Pacific Economic Co-operation forum. Both are among the four original members of the Trans-Pacific Strategic Economic Partnership, which looks set to be the building block for a free trade area in the Asia-Pacific.

Both are also founder members of a less well-known group known as the Forum of the East Asia and Latin America Co-operation or Fealac.

Heads of the governments from both sides on Wednesday highlighted the common ground their countries have, despite being separated by the Pacific Ocean, in the speeches they made.

It was Prime Minister Lee Hsien Loong's second trip to Chile. The first was in 2004 when the Apec summit was held there.

Chilean President Michelle Bachelet will be in Singapore next year when it is the Republic's turn to host the summit. She pledged to bring a big group of businessmen, just as PM Lee did on his Latin American tour.

PM Lee used the term 'kindred spirits' at a lunch in his honour. While the two countries have different cultures, languages and histories, they agreed on several issues.

This was probably due to their similar geo-strategic positions; both are small countries relative to their neighbours.

'In particular, we both believe that promoting free trade, maintaining open markets and focusing on education are essential to economic growth and development.'

His day in the sunny capital of Santiago began with a wreath-laying ceremony at the monument and crypt of Bernardo O'Higgins, the hero of the Chileans' fight against Spanish rule in the 1800s.

Then it was on to La Monedo Palace for an hour-long meeting with the President.

Ms Bachelet had much praise for Singapore's education system, noting that Singapore students consistently top international rankings, when she spoke at the lunch.

An agreement was signed on Wednesday that will allow for bilateral exchanges of students and teachers. The exposure of young Chileans to scientific and technical developments in Singapore would 'consolidate our cultural understanding'', said Ms Bachelet.

Likewise, PM Lee cited the memorandum of understanding as one way to strengthen people-to-people ties, with Chilean students in Singapore returning to their home country as the Republic's unofficial ambassadors.

He later toured the Centre for Mathematical Modelling at the University of Chile, which is working with Singapore's Nanyang Technological University on a collaborative agreement.

Bilateral trade reached US$227 million dollars last year, a small but growing sum which leapt 175 per cent over the year before. Chile is a major copper producer and is known for its wines.

Both leaders made a pitch for more investments in their countries, which each described as gateways to their respective regions.

An agreement was also reached yesterday between the Arbitration Centre of the Santiago Chamber of Commerce and the Singapore Mediation Centre, intended to assure businessmen of the security of their investments, among other things.

The day was rounded off with the start of a four-day Singapore Food Festival at the Hyatt hotel, for which chefs from Singapore's Changi Village hotel had been brought in to dish out satay, laksa and other hawker favorites.

Gracing the occasion, PM Lee introduced the Chilean guests to Singapore food, which he said was what Singaporeans abroad missed the most about home. He wasn't just there to open the festival, he quipped, but to join in the feasting too.