Obama impressed with progress in Mujica's Uruguay
President Obama has said he has been "consistently impressed" with progress in Uruguay since President Jose Mujica took office in 2010.
During a face-to-face meeting in Washington, Mr Obama called Mr Mujica a leader on human rights throughout the Western hemisphere.
For his part, President Mujica suggested that Americans prepare themselves for demographic changes.
The Uruguayan leader said the US would have to become a "bilingual country".
The two presidents discussed trade and strengthening existing educational exchanges, but there was no mention of Uruguay's controversial legalisation last week of the production, sale and consumption of marijuana.
The meeting between the two presidents was interesting not so much because of what they said to the media, but because of what they didn't say. Speaking before their private meeting, both leaders avoided references to Uruguay's recent legalisation of marijuana, as well as President Mujica's willingness to provide refuge in Uruguay to prisoners from Guantanamo Bay. They also refrained from answering questions about these controversial issues, which may well have been discussed behind closed doors.
Some journalists in the Oval Office highlighted the fact that President Mujica was wearing a suit but not a tie, unlike his American counterpart. It was a powerful symbol in the most formal of settings by a leader who has distinguished himself in the world stage for his austere lifestyle. While speaking to President Obama, he even referenced the "humbleness" of "his little Uruguay".
The marijuana law, which Mr Mujica signed on 6 May, is intended to deprive criminals of the lucrative sale of cannabis, but critics argue it will expose more people to drugs.
President Obama said he and his counterpart both thought there was "room for additional work to expand trade and commerce between our countries".
He also praised Uruguay's "contributions to peacekeeping in places like Haiti and Africa", adding that the two nations could learn from each other on how to deal with diverse societies.'Tobacco is murderous'
The Uruguayan president spoke about his country's tough restrictions on tobacco smoking, which have led to it being sued by the US tobacco giant Philip Morris.
"In the world, eight million people die each year from smoking tobacco," he said.
"This is mass murder. We are in an arduous fight, very arduous, and we must fight against very strong [corporate] interests."
Mr Mujica also said that, as people were learning English in his country out of necessity, Americans also had to learn Spanish because of an increase in the Latino population.
"The strength of Latin women is admirable, and they will fill this continent with people who speak Spanish and also Portuguese."
The meeting come less than two months after President Mujica announced his country would take five prisoners from the US Guantanamo Bay detention centre in Cuba.
He said he had accepted a request from President Obama "for human rights reasons".