The European Union (EU) has initialed an interim trade agreement with four Southern African countries, the European Commission announced.

    The agreement will apply initially to Botswana, Lesotho, Swaziland and Mozambique, with Angola ready to join as soon as possible.

    The EU's executive arm said South Africa and Namibia will also determine their participation in the agreement in the coming days, adding the agreement was open to other parties in the region to join when they wished.

    "This is an historic step forward in the relationship between the EU and Southern Africa," said EU Trade Commissioner Peter Mandelson, who is now on a six-day visit to China.

    The initial agreement includes a WTO-compatible market access schedule and provisions on development co-operation and other issues.

    The European Commission said both the EU and the Southern African countries will continue negotiations towards a full Economic Partnership Agreement (EPA) in 2008.

    Currently, the EU is negotiating with the six regions of the African, Caribbean and Pacific Group (ACP) of countries on EPAs, which are designed to replace the existing Cotonou Convention signed in June 2000.

    The commission had hoped to formally sign EPAs with ACP countries before December 31. However, it appeared only possible so far to strike interim agreements on goods, with more sensitive issues such as investment rules and services to be left for further talks.

    Although the EU said the new deal will help nearly 80 ACP countries develop economies and attract foreign investment, aid groups and some ACP countries are opposing the deal, saying it opens African economies up to too much competition since the EU is demanding reciprocity of market access to ACP countries.