US, Brazil say cheers in whiskey, cachaca deal

The drinks deal came on the sidelines of Brazilian President Dilma Rousseff's visit to the White House Monday for talks aimed at strengthening ties between the Americas's two largest economies.

US Trade Representative Ron Kirk and Brazil's foreign trade minister, Fernando Pimentel, signed an exchange of letters launching the process, Kirk's office said in a statement.

"This exchange of letters represents a very positive development for both of our industries, and reflects our governments' commitment to stronger bilateral trade ties," Kirk said in the statement.

The designation means that only Brazilian-made cachaca can be marketed as such in the United States and only products made in the United States may be sold in Brazil as bourbon or Tennessee whiskey.

Bourbon is an American-born whiskey, usually made with corn and aged in oak barrels. Tennessee whiskey is bourbon produced in the southern state of Tennessee.

Cachaca has been gaining popularity in the US as a crucial ingredient for the caipirinha -- Brazil's national cocktail.

Monday's agreement is "an historic event that is sure to contribute to further acceleration of trade in distilled spirits between the two countries," the Distilled Spirits Council, a Washington-based trade association, said in a statement.

The council's president, Peter Cressy, noted a rapidly growing market for American whiskeys in Brazil, with US whiskey exports to Brazil up 519 per cent from 2001 to 2011, and growing from $517,000 to $3.2 million.

"Brazilians are rapidly acquiring a taste for the finest American whiskeys, and today's agreement -- when implemented -- will ensure the integrity and authenticity of these world-class drinks," Cressy said in the statement.

According to the US government, Brazil was the United States's eighth-largest goods trading partner, with a total $74 billion in goods trade. The US had a $12 billion goods trade surplus with Brazil.

The US proposal requires approval by the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau.