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Assistant US trade representative for Africa Florie Liser told a press conference at the Aloe Ridge hotel near Muldersdrift that parties still had to decide on the scope of the agreement.
Liser said the US wanted the agreement to be as broad as possible.
"We want an ambitious free trade agreement. We want to open our markets as much as possible," she said.
Liser and South Africa's Department of Trade and Industry chief director for trade negotiations, Xavier Carrim - the SACU delegation head - sought to assure the media a free trade agreement would go beyond the trade opportunities generated by the 2000 US Africa Growth and Opportunity Act (Agoa).
Services, investment and intellectual property rights were some such issues.
Agoa is scheduled to expire in 2008. Although the George W Bush administration has indicated it intended renewing the law, it was by no means certain the US Congress would enact the necessary legislation, Carrim said.
Therefore, there was a sense of urgency to "lock in" the benefits of Agoa in a free trade agreement.
The Aloe Ridge talks were a sequel to a first round of negotiations held in early June.
US Trade Representative Robert Zoellick last year notified Congress of Bush's decision to negotiate a free trade agreement with SACU.
SACU members Botswana, Lesotho, Namibia, South Africa and Swaziland comprised the largest US export market in sub-Saharan Africa, with US2.5bn in US exports in 2002.
"In both directions we are very important to each other," Liser said.
The bulk of the second round of talks consisted of information exchange, with the two parties learning more about each others' trade regimes.
"In the course of this second round of negotiations, the parties discussed agricultural and industrial (including textile and apparel) trade, standards, customs procedures, rules of origin, trade remedies, investment and services," Cassim said, reading from a prepared statement.
"The US and SACU moved to more focused discussions of principles and provisions in these areas.
"The texts submitted by the US were used as a tool to facilitate these discussions.
"SACU intends to submit its texts on these areas by the third round of negotiations. SACU and the US intensified their dialogue and agreed on a way forward."
While coy about what areas of agreement had been found, both Liser and Cassim were even more keen to avoid using the words "disagreement" and "contentious issues", settling instead on "areas of sensitivity".
Cassim identified two areas of sensitivity, namely agricultural subsidies - "an important issue even within the World Trade Organisation" - and anti-dumping measures.
US and European agricultural subsidies are widely blamed for undermining farming in the developing world, including Africa, where the World Bank and International Monetary Fund have long frowned on the practice.
The next round of trade talks was scheduled for October in Washington DC.
Liser said the US was keen to involve the private sector in that round of talks while also allowing US Congress members to meet the SACU negotiators.
She added that Africa enjoyed much sympathy on the Hill and that several US Representatives and Senators wanted to meet the SACU team.
Lesotho delegate David Rantekoa said the parties had strict instructions from their principals to finalise the agreement by late 2004.
