Southern African Development Community (SADC) trade ministers met in Cape Town on Friday against the backdrop of continuing unhappiness and division over the best way to proceed with economic partnership agreement (EPA) negotiations with the European Union (EU).

Relations between the so-called "SACD-EPA" group, comprising Botswana, Lesotho, Namibia, Swaziland, Mozambique, Angola and South Africa, could be a particular point of strain. This, owing to the fact that Botswana, Lesotho, Namibia, Swaziland and Mozambique moved ahead in early June to sign "interim EPAs" with the EU, notwithstanding South Africa's objections.

There could be specific tension between some of the Southern African Customs Union (Sacu) members, given South Africa's subsequent warning that it may be forced to strengthen customs controls within Sacu to avoid the transshipment of EU exports to the South African market though Botswana, Lesotho and Swaziland.

Such action could flow from a misalignment between the interim EPAs (IEPAs) and the Trade Development Cooperation Agreement (TDCA) between South Africa and the EU, especially regarding the rules of origin.

Africa's largest economy, where the new government is seeking to sustain an already embattled clothing and textiles industry, was concerned about the fact that the IEPAs only required a single-stage of manufacture to be allowed entry into the Southern African market through a third country in the EU. The TDCA demands two stages of manufacture, which South Africa insisted had to be sustained to safeguard its industry.

But, the country had other misgivings that extend back to the earliest days of the EPA talks, when South Africa had initially been excluded from the SADC EPA grouping.

In fact, EPA negotiations were under way across the world and there were also various African blocs in talks with the EU, some of which involved other SADC members - the Democratic Republic of Congo is, for example, part of the Central African Economic and Monetary Community talks, while other SADC members were also part of the East and Southern African Group negotiations.

Many countries "initialled" EPAs ahead of the expiry of the so-called Cotonou market-preference agreement at the end of 2007, despite many countries raising misgivings.

With regard to the SADC EPA, Angola and South Africa refused to initial, while Namibia raised many reservations.

There was particular concern about the limitations imposed on trade-policy space, including: a ban on export taxes; a lack of recognition of the right to protect infant industries; and a "more favoured nation" clause, that required signatories to extended the same level of market preference to the EU, as was extended to any other major economy in trade negotiations.

The SADC EPA group raised these concerns again in March, during a negotiating session in Swakopmund, Namibia, where it was agreed that a joint declaration be drafted to compel further negotiations after the signing of the IEPAs.

But no further negotiations were held on this text by June 4, when the European Commission indicated that it was necessary to move towards signature to avoid any possible World Trade Organisation challenge.

South Africa objected strongly, arguing that the Swakopmund text amounted to a statement of intent, which had little gravitas against the legally binding IEPAs.

However, the Botswana, Lesotho, Namibia, Swaziland, Mozambique moved ahead and signed.

South Africa's Trade and Industry Ministrer Dr Rob Davies argued that it was to these lack of guarantees that South Africa objected, and that it had no intention of seeking to precipitate the dismantling of Sacu.

"We kept saying that, unless these things were sorted out . . . it was going to create pressure in the region," Davies said, adding that South Africa was keen to deepen Sacu, rather than see it recede.

"We would like to see Sacu move closer towards an economic union. We would like to see us reaching common understanding on the direction of regional industrialisation . . . not just being an organisation of convenience, which is held together by the fact of transfers of revenues."

However, he warned that should the operation of the IEPAs move in a direction contrary to that vision, South Africa would have to defend itself, and "send Sacu progressively backward".