The two leaders met at the Los Pinos presidential residence on the second day of Bachelet´s three-day official visit to Mexico, and the pair signed a joint declaration in which they reiterated their commitment to "strengthen cooperation for the development and integration" of the region.

One of the measures agreed to in Mexico City between Calderón and Bachelet was the establishment of an advisory council for the Strategic Association Agreement, or AAE, prevailing between the two countries, something Calderón called "one more step in that direction which will contribute to strengthening relations in all areas."

The AAE was signed in January 2006 by Vicente Fox and Ricardo Lagos - the former Mexican and Chilean leaders respectively - and entered into force on Dec. 20. The two nations have had a bilateral free trade treaty since 1998.

Calderón and Bachelet agreed to direct their economic officials to "resume negotiations immediately" to finalize the financial services section of the free trade pact and "obtain in the shortest time possible results that favor the business area."

In 1990, bilateral trade between Mexico and Chile was US$158 million, but that flow had ballooned to US$3.237 billion by 2006.

At their joint news conference after the meeting, Calderón called bilateral relations "excellent" and he pointed to them as an example of the kind of ties Mexico City wants with other Latin American nations.

He also called Bachelet´s trip to Mexico the beginning of "an era of close collaboration" between his country and the rest of Latin America, despite Mexico´s tight NAFTA- and immigration-based links with the United States.

The conservative Calderón also said he wanted "constructive relations ... with Cuba and Venezuela," ties that deteriorated during Fox´s 2000-2006 presidency.

For her part, Bachelet said the bilateral relationship between Mexico and Chile "has enormous room to grow," adding that she saw "great opportunities for the businessmen of the two nations," not to mention for business investors.

"We have a bilateral space wherein we can tighten our relations, but we can and must undertake this association from a regional and, at the same time, global perspective," she said.

She said Chile takes seriously Calderón´s desire to maintain Mexico´s strong presence in Latin America and the Caribbean and "therefore ... Chile and Mexico can and must work together in the region, and many are hoping that we do."

Bachelet said she understands the stance of her Mexican counterpart in security matters, but she added that she did not want to comment on the policies he is carrying out to fight organized crime.

"I fully share the idea that a government, a president, has to use all the means necessary to deal seriously and responsibly with this area," Bachelet said at Los Pinos after her meeting with Calderón.