The Economic Partnership Agreement (EPA) group of SADC will meet with the European Commissioner for Trade Peter Mandelson at the Phakalane Golf Estate Hotel Resort tomorrow.

In a joint statement issued in Gaborone, the SADC secretariat and European Commission say the meeting will focus on negotiations for a full EU-SADC EPA, including liberalisation of trade in services and rules on investments as well as the implementation of the current Interim EU-SADC EPA on trade in goods.

The South African media last week warned that SACU faced collapse after Botswana, Lesotho, Namibia and Swaziland broke ranks with SA and signed the interim agreement.

But South Africa's chief trade negotiator, Xavier Carim, said: "None of us are looking at the break-up of the customs union.

We will try to go forward in a way that will not undermine the benefits achieved by the other countries, but also not undermine Namibia and SA's positions. The EU has indicated it is prepared to address some of the problematic issues."

But a Johannesburg newspaper Business Day was insisting that implementation of the interim agreement was being hampered by SA's decision to opt out.

It said because of conflicting tariff regimes resulting from SA's opting out, the region would have difficulty enforcing common external tariffs. For instance, the EU agreed to reinstating a five percent tariff on beer to shield Namibian brewers against European imports.

But with SA not party to the agreement, beer imports into SA attract no tariff, creating a loophole to circumvent the tariff.

Observers fear the meeting, the first since the signing of the Interim EPA on November 23 last year, is likely to drive a wedge between SADC countries belonging to the South African Customs Union (SACU) - Botswana, Lesotho, Swaziland, South Africa, Namibia and Mozambique.

South Africa and Namibia declined signing, while Botswana, alongside Lesotho, Swaziland and Mozambique, assented.

The interim agreement was limited to goods, while negotiations for services and rules on investment were to start this year.

While the EU has agreed to import goods on a duty-free and quota-free basis except for a transition period for rice and sugar, SADC member states have up to 2018 to dismantle tariffs on products they have agreed to liberalise.

SADC countries have safeguarded some sensitive products, such as Botswana's beef, on which the economic bloc will not tolerate any tariff reductions.

Current parties to the agreement, except Namibia, have agreed to continue negotiations for a full EPA, including liberalisation of trade in services and rules on investments, with a view to concluding negotiations by end of 2008.