South Africa and the European Union are hoping to meet early next year to settle the issue of geographical indicators and trademarks.

The two sides plan to meet in the first quarter of 2007, but no fixed date has been set.

The news will delay a proposed payment of ZAR15m (US$2.1m) in compensation offered by the EU to South Africa if the country relinquishes its claims to regional names such as Port and sherry. The two sides have spent around five years trying to settle the issue but have not met to discuss the matter since 2004.

The South African government has not ratified the 2002 Wine and Spirits and Free Trade Agreement between the two sides, saying it wants clarification of the principles related to the linking of geographical indicators and trademarks.

The EU's regulations in turn do not allow for the ZAR15m to stand over for an extended period and it has now apparently been channelled to projects in Kosovo, said Sandile Tyini, SA's director of bilateral trade with Europe and chief negotiator.

The EU has also unilaterally declared names such as tawny and ruby, which describe styles of Port, off limits. South Africa will be questioning the legitimacy of these points as well when the parties eventually meet.