Lima - Soldiers in camouflage fatigues and policemen in black riot gear lined the main streets of Lima in Peru, to make sure nothing and no one could mar the biggest international event the Latin American country has ever held.

Leaders from big and small countries have converged here, from outgoing United States President George W. Bush to newly elected Prime Minister John Key of New Zealand, to speak to the world on behalf of the Asia-Pacific region.

Over at the government palace yesterday morning were several groups of men, in all manner of military dress. Prime Minister Lee

Hsien Loong was given a 21-gun salute before he reviewed the honour guard, who were dressed in ceremonial red and blue garb.

He was then escorted into the Golden Hall by Peruvian President Alan Garcia for a meeting, during which they discussed a possible double taxation treaty between the two countries.

This is Mr Lee's first visit to Peru, a country with which Singapore has just signed a free trade agreement. It will kick in early next year, allowing more than 87 per cent of Singapore's exports to enter Peru tariff-free immediately.

Another link: Peru announced last Thursday that it will join the Trans-Pacific Strategic Economic Partnership or P-4, of which Singapore is a member country. The pact is much lauded for its liberal approach to removing trade barriers.

Mr Lee told the media the two countries were also talking of a possible air services agreement.

The current economic slowdown is a challenge especially to smaller countries such as Singapore and Peru.

'In these trying times, we need to work together to keep global markets open and encourage regional economic integration,' he said.

Mr Garcia also referred to the bilateral free trade agreement, saying he hoped it would spur Singapore's investments in Peru.

He conferred upon Mr Lee the Order of the Sun, an honour that dates back 200 years and pays tribute to the country's freedom fighters. The two men sealed their meeting with glasses of pisco sour, a tequila-like Peruvian concoction.

Their morning meeting took place on the sidelines of the first day of the Asia-Pacific Economic Cooperation (Apec) summit. The 21 leaders were sequestered in the Ministry of Defence Convention Centre for their annual retreat, a week after a landmark Group of 20 countries' meeting in Washington to search for solutions to the financial crisis.

A strong Apec leaders' declaration on overcoming the financial crisis and rejecting protectionism is expected. Already, Apec ministers have instructed their officials to fly to Geneva to start work on resuming the stalled Doha Round of trade talks.

Several leaders squeezed in time during their visit here to address Apec businessmen and hold private chats with their counterparts.

Mr Bush delivered what was probably his last keynote speech at an international event - on strengthening the Asia-Pacific region - before he hands over power to Mr Barack Obama in January.

South Korean President Lee Myung Bak and Hong Kong Chief Executive Donald Tsang also spoke, giving the Asian point of view on the financial crisis. Both men, as well as New Zealand PM John Key, are on Mr Lee's packed schedule of bilateral meetings.

He leaves for Sao Paulo today to begin a two-day trip to Brazil before moving on to Santiago in Chile.

bertha@sph.com.sg