13 July 2010 | Nick Martindale

Buyers in southern Africa will be hoping this week’s talks between the countries that make up the Southern African Customs Union (SACU) – the world’s oldest customs exchange union – will pave the way for an agreement with the European Union.

Later this week, leaders of South Africa, Botswana, Swaziland, Lesotho and Namibia are set to meet to attempt to heal the rift caused by the decision of Botswana, Swaziland and Lesotho to establish their own interim trading arrangement with the EU last year.

South Africa has had its own arrangement in place with the EU since 2000, in addition to its membership of SACU. Within SACU, South Africa is responsible for collecting external tariffs and also subsidises the other member states by as much as 1 per cent of its GDP a year.

If the dispute can be resolved, a longer-term challenge would be to establish a common trading agreement between SACU and the EU, introducing greater consistency in sourcing from the European member countries.

Catherine Grant, director of trade policy at Business Unity South Africa, said: “It’s only a small group of products that are different between the two agreements [between the EU and South Africa and the interim arrangement with the other countries] so it should be relatively easily to marry the two.”

She added it was still possible the union itself could collapse, although this was unlikely. The SACU meeting is scheduled for 15 and 16 July.