ISLAMABAD, Aug 2: The World Trade Organization's 147 member countries will start negotiations from September to work out an agreed formula along with time line for scaling down agriculture tariffs, subsidies and all distorting trade support.

Speaking at a press conference here on Monday, Commerce Minister Humayun Akhtar Khan said it was expected that the whole round would be completed by December 2005 at the next ministerial conference to be held in Hong Kong.

Elaborating the main features of the July package, the minister said that in the agriculture sector, the member states agreed to move towards a fairer and more market-oriented trading system in three areas - export subsidies, domestic support and market access.

He said that export subsidies would be eliminated in a phased manner by a date certain to be negotiated in the post-July negotiations. "The domestic support will be cut substantially through a tiered formula - which will cut higher subsidies more steeply.

These measures will only affect richer countries which dole out lavish subsidies to their farmers. All trade-distorting domestic support will be reduced through a tiered formula," he added.

"We are one of the largest milk producers in the world. However, due to huge subsidies by the rich countries, we are a net importer rather than being an exporter," he remarked.

Following the elimination of all subsidies, it was estimated that Pakistan would earn $2-3 billion in export of milk products, cotton farmers would gain about $300 million and export at least 400,000 to 5000,000 tons of sugar in the near future. That can easily translate into a gain of $100 million.

With the opening up of restricted markets of rice regime, Pakistan's rice could fetch better prices and could gain over $200 million, he added. In the area of market access, Pakistan would not do any cuts on its products, he said and added the cuts would apply from bound levels (level beyond duty could not be raised).

"Our bound tariffs are 100 to 150 per cent. While our applied tariffs (except edible oils) are less than 25 per cent. Thus any cuts would not affect our applied tariffs," he said.

Mr Khan said: "We could designate some products as 'sensitive products' and their number could be proportionally higher than those maintained by developed countries. We can have access to Special Safeguard Mechanism, which we can use if there is any dumping of agricultural products."

On non-agricultural market access (industrial goods), significant cuts have been agreed. However, since many countries have preferential access to developed countries' markets, they were insisting against any ambitious cuts.

Therefore, this area has been left vague and will need substantial work after the summer break with negotiations commencing in September/October. It had also been agreed to address non-tariff barriers, he said. On Singapore issues, negotiations will only be held on trade facilitation.