When a spirit becomes a legal intellectual property of a country, that is when we start talking about Denomination of Origin. The idea of the Denomination of Origin is coming from Europe, where small artisan producers believe that the Region where a certain food, wine or spirit is produced has a signature unique effect on its taste. So to provide promotion and protection to these small producers, Appellation of Origins, Geographical Indications and Denomination of Origins started to form and legalize themselves.
Some examples from around the world. Beaufort, Comté and Roquefort are from France, Gorgonzola is from Italy and Feta is from Greece. There are also famous protected wines like Champagne, Bordeax, or Burgundy. There are many origin protected spirits too like Bourbon from the United States, Scotch from Scotland and Cognac from France. All of these food and drinks are protected by bilateral trade agreements. So let’s say the United States sign a contract with Mexico as part of a trade agreement(this is currently part of the NAFTA contract). In the agreement, the United States accept Tequila as a Mexican Origin protected spirit and Mexico accept that Bourbon is a US Origin protected spirit, and they take all legal action to enforce this in their respective countries. Mexico will check if an imported bourbon has the appropriate legal documents and disallow bourbon’s local production. Then of course, the United States do exactly the same with tequila.