U.S., Brazil begin talks on distilled spirts

By Vicki Needham - 04/09/12 12:30 PM ET

U.S. and Brazilian officials took steps on Monday to ease their trade restrictions on distilled spirits.

U.S. Trade Representative Ron Kirk and Brazilian Trade Minister Fernando Pimentel agreed to begin the process of recogizing specific liquors made in their respective countries — bourbon whiskey and Tennessee whiskey made in the United States and Brazil's cachaça would be marked as distinctive products.

“Cachaça and bourbon and Tennessee whiskey are among the United States’ and Brazil’s most unique and well-recognized products," Kirk said in a statement on Monday.

Kirk called the move "a very positive development for both of our industries" that "reflects our governments’ commitment to stronger bilateral trade ties.”

In 2011, Brazil was the eighth-largest goods trading partner with the United States with $74 billion in total goods trade. The U.S. goods trade surplus with Brazil was $12 billion.

President Obama is meeting with Brazil's President Dilma Rousseff at the White House on Monday to discuss strengthening the relationship between the two nations.

"The potential is enormous and the obstacles for an agreement, while very real, could be overcome by leaders determined to do so," said Moises Naim, a senior associate at the Carnegie Endowment for International Peace in a Financial Times column on Sunday.

Naim has been pressing for a broader trade deal between the U.S. and Brazil for more than a decade.

"A broad, ambitious deal can disrupt current trends where the U.S. risks not becoming a major beneficiary of Brazil’s continuing economic success and Brazil risks being at odds with a geopolitical power whose support it needs if it wants to be an influential global player," he wrote.

Naim said talks are unlikely to result in any larger agreement.

"Unfortunately, unless Rousseff and Obama disrupt the status quo in their countries’ relationship, this will continue to be a story of missed opportunities, in which minor agreements are extolled as epic changes while, in practice, the two nations continue to fail to forge a world-changing alliance," he wrote.

The Treasury Department will publish a notice of proposed rulemaking that will solicit comments from the public.