US and Brazil plan to exchange toasts with cachaça and Tennessee whiskey

Tuesday, April 10th 2012 - 05:32 UTC

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World exports of the sugar cane distilled liquor are in the range of 17 million dollars mainly to Europe

US and Brazil plan to boost trade and cooperation in their respective national drinks, cachaça (distilled sugar cane liquor used to make caipirihna cocktails, and Tennessee whisky. The letter of intent was signed Monday by US Trade Representative Ron Kirk and Brazil’s Trade Minister Fernando Pimentel.

Under the plan the US pledges to recognize cachaça as a distinctive Brazilian product, and Brazil promises similar recognition for bourbon and Tennessee whiskey.

The accord is one of at least eight agreements ranging from aviation and education to the environment that were signed on the first day of Brazilian President Dilma Rousseff’s two-day visit to the US.

“Cachaça has a Brazilian face,” Robson Andrade, head of the National Industry Confederation, told reporters after a meeting of business leaders with Rousseff in Washington.

“This recognition of a genuinely Brazilian product shows the value that the American government attaches today to Brazil.”

In an e-mailed statement, Kirk said that “Cachaça and Bourbon and Tennessee Whiskey are among the United States’ and Brazil’s most unique and well-recognized products. This exchange of letters represents a very positive development for both of our industries, and reflects our Governments’ commitment to stronger bilateral trade ties.”

The US Alcohol and Tobacco Tax and Trade Bureau will publish notice of the proposed change and solicit comment. If it issues a regulation designating cachaça as a distinctive Brazilian product, Brazil will then recognize the two U.S. whiskeys.

In Brazil, 40.000 distillers make 4.000 different brands of cachaça with total sales of 2 billion Reais (1.1 billion dollars) a year, according to the Brazilian Cachaça Institute’s website. The country, which is also the world’s largest sugar exporter, sold 17.28 million worth of cachaça to 60 countries last year. The main importers are Germany, Portugal, the U.S. and France.

Brazilian exporters hope the agreement will boost sales of its popular liquor, said Andrade. Since 2000 Brazil has had to label cachaça as Brazilian rum, according to the Trade Ministry.

The US Congress allowed an import tariff on Brazilian ethanol to expire last year and renewed the US Generalized System of Preferences that exempts many Brazilian goods from duties in the US market.