SINGAPORE wants to build new links with Latin America and deepen its ties with economic powerhouse Brazil.

'We see Latin America as a new economic frontier offering good business and investment opportunities,' Prime Minister Lee Hsien Loong on Monday told businessmen belonging to the Federation of Industries in the state of Sao Paolo.

Singapore's Foreign Minister was already in capital Brasilia, for the first ever dialogue between Asean and Mercosur, a trade grouping of Brazil, Chile, Paraguay and Uruguay set up to promote trade and investment in areas such as health and education.

Singapore, he said, is keen to work towards a free trade agreement with the grouping. He also hoped that other bilateral agreements could be explored to help grow business interests, such as an investment guarantee agreement and a double taxation treaty.

PM Lee arrived in Sao Paulo on Monday from Lima in Peru, where he attended the Asia-Pacific Economic Co-operation summit. He is swinging through Brazil and Chile, on a mission to raise Singapore's profile in Latin America and open doors for businesses.

He is accompanied by some 14 Singapore business leaders, mainly from companies which already have a foothold in Brazil, such as Keppel and SembCorp in the maritime and oil rig industry.

Some government-to-government agreements are expected to be signed during his two-day stay in Brazil, including an air services agreement that is likely to see Singapore Airlines flying to Brazil.

He told the businessmen at a lunch in his honour that he was pleased to see that private sector collaboration had already moved ahead with the Singapore Business Federation signing two agreements with their counterparts to promote exchanges, among other things.

Later this week, oil giant Petrobas will sign a memorandum of understanding with Singapore's Ngee Ann Polytechnic.

In his speech, PM Lee highlighted the advantages of investing in Asean and in Singapore, which the Brazilians could use as a gateway to Asia. Bilateral trade in 2007 was US$3.2 billion (S$4.8 billion). Up to September this year, the number had already hit US$2.8 billion, with the potential to grow further, he noted, quipping that one interesting Brazilian export to Singapore was frozen chicken parts.

His host, Mr Paulo Skaff, head of the business federation, agreed that more could be done to increase trade and promised to organise a business mission to Singapore next year.

He presented PM Lee with a medal, a meritorious award from the federation which has been conferred only to three other heads of government so far, including Peruvian President Alan Garcia.

On his part, PM Lee introduced the businessmen to the Portugese version of Minister Mentor Lee Kuan Yew's memoirs, which will be launched officially in the capital Brasilia today in the company of Brazilian President Luiz Inacio Lula Da Silva.