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Brazil and its MERCOSUR partners, Argentina, Paraguay, and Uruguay, implemented the MERCOSUR Common External Tariff (CET) on January 1, 1995. The CET currently covers 9,626 items, with tariffs mostly ranging between zero and 21.5 percent. Within the CET, certain sectors are treated separately and are organized on special lists. The list for informatics and telecommunications goods contains 427 items with tariffs in 2002 ranging between zero and 26 percent; a tariff hase-down schedule should bring the top tariff down to 16 percent by 2006. The automotive list covers 55 items (vehicles and parts) with a tariff rate of 35 percent; Brazil has negotiated automotive agreements with third countries, which provide duty-free treatment within quotas. A MERCOSUR suspension of duties ranging from 2 percent to 15.5 percent on some 550 pharmaceutical products has been extended until December 31, 2004. Although the CET was meant to be a comprehensive, common tariff schedule, MERCOSUR countries have agreed to allow exceptions. Brazil has 100 exceptions to the CET, with tariffs reaching as high as 55 percent on coconuts and peaches. The CET remains a significant barrier to increased U.S. exports of agricultural products, distilled spirits, and computer and telecommunications equipment. In addition, significant

barriers exist to U.S. textile exports. In particular, Brazil applies additional import taxes and charges that can effectively double the actual cost of importing textile products into Brazil.Brazil cheap hotels