Prime Minister Stephen Harper is promoting Canada as a compassionate alternative to the far-left ideology of Venezuela and the hard capitalism of the United States, as he continues his tour of Latin America.

In a major foreign policy address in Santiago, Chile, Harper said Latin America is sometimes painted as being at a crossroads between the two extremes.

"This is, of course, utter nonsense," he told a business audience of about 500. "Canada's very existence demonstrates that the choice is a false one. Canada's political structures differ substantially from those in the United States.

"Our cultural and social models have been shaped by unique forces, and we've made our own policy choices to meet our own needs."

Harper also said Canada promotes democracy and human rights, but is different from the U.S. because it has policies of "social cohesion" -- most notably universal health care.

He added that Canada has no intention of conquering or dominating another nation, but rather seeks to build strong economic and social ties.

"What we can do is bring forward our resources and goodwill ... to build a more democratic, prosperous and secure hemisphere for all its citizens," he said.

The prime minister met earlier Tuesday with Chilean President Michelle Bachelet and announced that the two nations will expand their current free-trade agreement into other areas.

The expansion comes as the two countries mark the 10th anniversary of the current free-trade agreement.

CTV's Robert Fife, who is travelling with the prime minister, said that Canadian companies currently have about $11 billion invested in Chile.

On Monday, Harper became the first Canadian prime minister to visit Colombia as part of his Latin American tour.

In Bogota, Harper announced that Canada would engage in free-trade negotiations with Peru and Colombia -- considered the most violent country in the western hemisphere.

Canada and Colombia are also negotiating a deal to eliminate double taxation, said Harper.

The prime minister also dismissed criticism that Canada was putting trade ahead of human rights.

Colombia continues to struggle with Marxist guerrillas and a flourishing drug trade.

Human rights and other non-governmental groups in Colombia were quick to attack the free-trade talks.

Harper will next meet with Barbados Prime Minister Owen Arthur and other Caribbean leaders in Barbados. He will then end his tour in Haiti where he will meet with President Rene Preval.

Harper's visit marks the first time a Canadian leader has visited the area since 2004.

With files from The Canadian Press