The department of trade and industry (DTI) is to consult widely with local business, and within Nedlac, on the proposed free trade agreement (FTA) with the United States.

DTI's chief negotiator in the trade talks, Xavier Carim, on Thursday told Parliament's trade and industry portfolio committee that government would spend the coming "few months" interacting with business, as the negotiations gather pace.

It was hoped the final agreement, between the Southern African Customs Union (SACU) and the US, would be in place by the end of next year, he said.

SACU consists of Botswana, Swaziland, Lesotho, Namibia and South Africa.

Carim said the consultation period would help negotiators gain a better understanding about areas of concern to the business community.

"We have no yet had sufficient consultation with business, but that will happen over the next few months."

The agreement should bring more predictability to SACU's trade with the world's largest economy.

Responding to concerns from MPs that the US could use the trade pact to "bully" SACU countries, he said: "The ability of the US to withdraw preferences exists now."

"If we enter a free trade agreement, these preferences are bound... we want to create a predictable, legal basis for market access."

He said the Africa Growth and Opportunities Act (AGOA) had helped to boost trade with the US, but there was no certainty the measure would be extended after 2008, or whether certain products would their lose duty-free status.

The act could also be challenged under World Trade Organisation rules, Carim said.

AGOA is a unilateral US trade regime that offers a range of goods and products from African countries free access to the US market.

South Africa exported goods worth about R30-billion to the US in 2002, and that country accounts for some 10 percent of South Africa's total trade.

Negotiators from Sacu and the US held a first round of talks in Pretoria in June. These dealt, mainly, with setting the landscape for further talks.

Carim said the SACU negotiators, led by South Africa, hoped to submit the text for the first phase of the negotiations by October this year.

Members had agreed to divide the negotiations into two phases, with the first concentrating on market access issues, such as industrial and agricultural tariffs, rules of origin, customs procedures and trade remedies.

The second phase would deal with trade issues, including services, investment, intellectual property, government procurement, labour and environment.

"The engagements, thus far, have been focused on exchanging technical information and agreeing to modalities of negotiations," he said.

The US first mooted a possible FTA with SACU in February 2002, and the process started in January this year. The two parties are due to meet every six to 10 weeks.