The agreement allows partnerships in development of defense technology by private companies, that may use public financing from both countries. Companies may request financing from the US defense research fund.
Brazil's defense industry has around 220 companies and exports to around 85 countries.
Although President Jair Bolsonaro is looking for a closer cooperation with the United States in defense and intelligence, Brazil's decisions regarding 5G technology are seen as a potential hurdle, according to an Trump administration official.
In a briefing on Saturday, the official, which asked for anonymity, pointed out that the activity of Chinese company Huawei Technologies Co Ltd, a big supplier of equipment to the Brazilian telecom sector, may prevent a stronger cooperation.