BALI, Indonesia (AP) -- A joint U.S.-European Union proposal to liberalize trade in green goods and services such as solar panels would boost the availability of technology to battle global warming, a top U.S. trade official said Sunday.


An Indonesian activist at a green protest in Jakarta Saturday.

U.S. Trade Representative Susan Schwab said on the sidelines of the U.N. climate change conference in Indonesia that developing countries have an average of 9 percent tariffs on the list of 43 goods and services.

"The question is, how can we do a better job of making those available and ensuring additional use of climate mitigation technologies?" Schwab said after a meeting of trade ministers at the global warming conference in Bali.

Developing countries at the conference have called on wealthy nations to speed the transfer of climate-friendly technologies to help them reduce emissions of carbon dioxide and other heat-trapping gases blamed for rising global temperatures.

The tariff cuts, made by the U.S. and E.U. last week, would not apply to so-called biofuels, something emerging economies such as Brazil had been pushing for. It is not clear how much support the trans-Atlantic offer will garner in the 151-member World Trade Organization.

Brazilian Foreign Minister Celso Amorim, who also handles trade issues, objected to the proposal at a news conference after the trade meeting in Bali, saying that the list of goods was flawed because it omitted ethanol. Brazil is the leading exporter.

"This list is incomplete, it won't do much for climate change, it's not proven what effects that these goods will have on climate change," he said. "The single project whose effect on climate change is already shown and demonstrated, which is ethanol ... isn't part of the list."

Amorim said that use of ethanol over 30 years in Brazil had avoided the emission of 670 million tons of carbon dioxide.

The U.S.-EU proposal would only come into force as part of an overall agreement in the Doha round of trade liberalization talks, which have repeatedly stalled since their inception in Qatar's capital six years ago.

The U.S. and European Union targeted 43 goods "with clear environmental benefits," in order to promote their use worldwide and help combat global warming. But they rejected earlier this month a move by Brazil to include biofuels, such as ethanol.


American and European delegates to the WTO argued that the special environmental tariffs ought to be reserved solely for industrial goods, and not agricultural products. Brazil has been touting its sugarcane-based ethanol around the world as a cheap, eco-friendly alternative to fossil fuels that is being held back by high U.S. and European tariffs.

According to the Paris-based Organization for Economic Cooperation and Development, the global market for environmental goods and services is worth several hundred billion dollars each year.

BUENOS AIRES, Argentina (AP) -- Hugo Chavez and leaders of six other South American nations launched a regional development bank Sunday that the Venezuelan leader is touting as the continent's answer to U.S.-influenced international lenders.


Venezuela's Hugo Chavez talks to Nestor Kircher, left, and Cristina Fernandez at the bank's launch.

With as much as $7 billion in expected startup capital, backers say the Banco del Sur, or Bank of the South, will offer Latin American countries loans with fewer strings attached than those given by the World Bank, the International Monetary Fund or the Inter-American Development Bank.

The leaders signed the "founding act" at a ceremony at Argentina's presidential palace hosted by President Nestor Kirchner and his wife, president-elect Cristina Fernandez, who takes office Monday.

South American dignitaries and government officials cheered after the leaders signed the accord on a glass-topped table, backed by flags of their South American nations.

"This is the start of a historical moment," said Bolivian President Evo Morales, whose country is the continent's poorest.

He praised the bank as a new tool to fight poverty and ease inequalities and criticized what he characterized as heavy-handed lending practices of international lenders who demand austerity prescriptions as conditions for extending credit.

"Only strong and united can South America occupy its rightful place among nations," Brazilian President Luiz Inacio Lula da Silva said. "This will be the first international bank truly controlled by the nations of our continent."


Earlier, Chavez said the bank is "aimed at freeing us from the chains of dependence and underdevelopment."

The institution is one of several far-reaching proposals under Chavez's ambitious call to unite Latin American countries in a "confederation of republics." His vision also includes a transcontinental natural gas pipeline and trade alliances.

Critics note much remains to be determined about how the bank will operate and say it might turn out to be a largely symbolic project used by Chavez to spread his oil-financed influence.

But others call it a bold stroke for Latin America's financial independence.

"What you had in the past decade was the collapse of a very powerful creditors' cartel headed by the IMF," said Mark Weisbrot of the Washington-based Center for Economic and Policy Research. "This is the first step in creating an alternative."

Finance ministers of Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay and Venezuela will sit on the bank's board. Officials say it will dispense loans for projects from road-building to anti-poverty programs and regional integration plans such as cross-border rail lines.

Venezuelan officials say the bank's loans will be issued at interest rates similar to those of other international lenders.

"The bank is not against anything or anyone. It is in favor of the people of South America," Venezuelan Finance Minister Rodrigo Cabezas said when Brazil, the continent's largest economy in South America, committed to joining the enterprise.

Rodolfo Sanz, a Venezuelan state bank official, said initial capitalization is expected between $5 billion and $7 billion, depending on final pledges.

The bank will be headquartered in Caracas, with Bolivian and Argentine branches.

Augusto de la Torre, World Bank chief economist for Latin America, welcomed the bank.

"It's a very interesting initiative which I think expresses the desire to find stronger cooperation between Latin American governments," he told The Associated Press in a recent interview. "As far as the World Bank is concerned, this new initiative is not perceived as a competitor."

IMF-watcher Paul Blustein at Washington's Brookings Institution said the project highlights Latin America's yearning for greater autonomy after decades of sporadic financial crises and imposed austerity measures -- such as IMF missteps ahead of Argentina's 2002 economic meltdown.

"It's really emblematic of how Latin America has become disillusioned with the model that the IMF and the World Bank and the U.S. Treasury promotes -- the so-called Washington consensus," he said.


But he noted the IMF and World Bank have decades of know-how.

"I'm not so sure this institution is going to be any more successful," he said.

SHANGHAI, China (AP) -- China Petroleum and Chemical Corp., or Sinopec, and Iran have signed a long awaited agreement for development of the Yadavaran oilfield, the official Xinhua News Agency and Iranian reports said Monday.


Sinopec and Iranian government officials sign a $2 billion deal on Sunday in Tehran.

"The initial estimation of the project's cost is about $2 billion," Xinhua quoted Iranian Oil Minister Gholam Hossein Nozari as telling reporters at the signing ceremony in Tehran.

Zhou Baixiu, head of Sinopec's International Exploration and Production Unit, and Hossein Noqreka-Shirazi, head of international affairs for the Iranian Petroleum Ministry, signed the agreement, which completes a memorandum of understanding signed in 2004, the Iranian Republic News Agency reported.

China has been snapping up energy resources across the globe as it seeks to ensure supplies of oil and gas to fuel its booming economy. Its investments in Iran and Sudan have prompted complaints it is undermining diplomatic efforts to bring recalcitrant regimes in line.

Beijing has balked at new sanctions against Iran over its nuclear program, arguing for diplomatic solutions to the standoff. A new U.S. intelligence report that Iran stopped atomic weapons development in 2003, contrary to U.S. suspicions, may have cleared the way for Sinopec to move ahead on Yadavaran, although Washington is still arguing in favor of sanctions.

The Yadavaran deal calls for the Chinese company to invest in developing the oilfield in two phases, with the first phase to produce 85,000 barrels per day to be carried out in four years and the second phase to produce another 100,000 barrels per day to be completed in another three years, Xinhua said, citing Nozari.

Earlier reports had said the two sides were divided over Sinopec's request for a 15 percent return from the project and over the planned capacity for the project. China had argued for a target of 180,000 barrels a day to avoid excess production, according to Chinese state media reports.


The Yadavaran field is expected to have a potential output of 300,000 barrels per day of crude oil. It has 3.2 billion barrels of recoverable reserves, with recoverable gas reserves estimated at 2.7 trillion cubic feet.

Sinopec, Asia's largest refiner, has shares traded in New York, London, Hong Kong and Shanghai.

(CNN) -- Struggling UBS admitted Monday it would write down a further $10 billion in U.S. subprime losses and said it could record losses for the entire financial year.


UBS's third quarter operating loss was its first in nine years.

The Swiss banking giant also said it would borrow 13 billion Swiss francs ($11.51 billion) to strengthen its capital base, including 11 billion Swiss francs from Singapore's state-owned investment company, GIC, making it UBS's largest single investor with a nine percent stake.

Another 2 billion Swiss francs came from an undisclosed Middle Eastern investor.

UBS's board has also approved the replacement of a 2007 cash dividend with a stock dividend and the re-sale of 36.4 million treasury shares, raising a further 4.4 billion Swiss francs, according to a statement.

Chief Executive Marcel Rohner said the company had updated its loss assumptions in response to deteriorating conditions in the U.S. mortgage and housing markets which had made the value of UBS's subprime holdings "unknowable."

"In our judgement these writedowns will create maximum clarity on this issue and will have the effect of substantially eliminating speculation," said Rohner.

"Losses in sub-prime are very disappointing but come at a time when most of our businesses are generating close to record levels of profit. I am confident that, after these writedowns and with a strong balance sheet, we are well positioned for growth and profitability."

UBS's latest problems come after the bank reported third-quarter net losses of Swiss francs 830 million for the period to September 30, the first time in nine years it had recorded an operating loss. In the statement Monday, UBS admitted it could now face further losses.

"UBS revises its outlook for its fourth quarter 2007 from an overall Group profit, as anticipated in its announcement of 30 October 2007, to a loss," the statement said.

"It is now possible that UBS will record a net loss attributable to shareholders for the full year 2007."

Tony Tan, deputy chairman of GIC, denied its investment in UBS meant it was seeking control of the banking group.

"GIC is now the single largest investor in UBS and this is the largest investment GIC has made in any company," Tan told a news conference, The Associated Press reported.

"We did not make it a condition that our investment should have a representation (on UBS's board.) We have no desire to control the business of the bank."

Previously, Merrill Lynch and Citigroup had been the biggest casualties of the subprime crisis with Merrill losing more than $8 billion on mortgage securities in the last quarter, prompting the resignation of chief executive Stan O'Neal. Further losses are expected when it reports again in January.

At Citigroup, chief executive Chuck Prince was also toppled after he had to admit the company could take a writedown of $8-11 billion in the fourth quarter.

Meanwhile, Morgan Stanley is expecting to lose $3.7 billion in the fourth quarter when it reports this month and Bear Stearns expects to post a $1.2 billion writedown.

Altogether, mortgage-related writedowns cost the banking industry $40 billion in the third quarter and the fourth looks set to be worse.

SEATTLE, United States (AP) -- Boeing will decide on a plan to replace its popular 737 aircraft by 2012 at the latest, a spokeswoman told The Associated Press Thursday.

Last year, the company started seriously considering a successor for the 737, for which Boeing has won more than 6,000 orders since its 1967 debut.

Sandy Anger, a Boeing spokeswoman, said the company "must ensure it has the right set of breakthrough technologies in engines, aerodynamics, materials and other systems" to top the 737's efficiency.

Anger said Boeing estimates it will be ready with a replacement for the 737 "sometime in the middle of the next decade -- give or take a couple of years."

The 737 competes with Airbus' hot-selling A320, which went into service in 1988. Toulouse, France-based Airbus says it has sold more than 5,500 A320s

TOKYO, Japan (AP) -- Japan's economy grew less than originally thought in the third quarter because of a downward revision in businesses' capital investment, the government said Friday, clouding the outlook for the world's No. 2 economy.


The rising price of raw materials has put a drag on the Japanese economy in the third quarter.

The economy expanded at a 1.5 percent annual pace in the July-September quarter, worse than the preliminary estimate of 2.6 percent, according to figures released by the Cabinet Office.

The disappointing numbers come amid worries that Japan's growth might take a hit from a possible slowdown in the U.S. economy, which is wrestling with a credit crisis, as well as higher raw material prices.

Companies also apparently had greater inventories in their warehouses than first estimated, suggesting that demand may not be as strong as thought. Housing investment also dropped during the quarter.

"Inventories were a big contributor to the downward revision to the GDP," Economy Minister Hiroko Ota said at a news conference. Capital spending also negatively affected the data, she said.

Capital spending, which accounts for 15 percent of gross domestic product, was revised down to a 1.1 percent quarter-on-quarter rise from a preliminary 1.7 percent increase. Inventories subtracted 0.1 percentage point from growth.

Private residential investment plunged 7.9 percent -- the largest drop since a 11.1 percent tumble in April-June 1997 -- damaged by tighter building regulations that came into force in late June. That was slightly worse than the preliminary estimate of a 7.8 percent quarter-on-quarter drop.

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Consumer spending, which makes up about 55 percent of the economy, was unchanged from a preliminary 0.3 percent rise.

Overall domestic demand, as a result, subtracted 0.1 percentage point from growth, versus a 0.2 point contribution in the preliminary report.

Healthy demand for Japan's exports, however, supported growth, contributing 0.5 point to gross domestic product, upgraded from a preliminary 0.4 point contribution.

LOS ANGELES, California (CNN) -- Talks to end Hollywood's writers' strike abruptly ended Friday evening as studio negotiators walked out, accusing Writers Guild of America leaders of putting personal political agendas above the interests of writers.


Striking Hollywood writers rally in Burbank, California, Friday to call attention to their demands.

The writers' negotiators said they remain ready to continue talks "no matter how intransigent our bargaining partners are."

Statements from each side suggested they were far from a settlement to the five-week-long walkout. Both sides became more entrenched in their differences over what share of residuals writers would get for Internet and DVD distribution of shows and as new demands emerged.

Production on dozens of TV series and movies halted last month. More are expected to shut down in December unless a new three-year contract between the WGA and the Alliance of Motion Picture and Television Producers is negotiated.

The level of personal dislike among those around the bargaining table boiled to the surface in statements issued after the talks imploded Friday evening.

"The WGA organizers sitting across the table from us have never concluded even one industry accord," the studios' statement said.

The writers' chief negotiator, David Young, is a veteran of garment and construction industry contract talks and a newcomer to Hollywood negotiations.

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"While the WGA's organizers can clearly stage rallies, concerts and mock exorcisms, we have serious concerns about whether they're capable of reaching reasonable compromises that are in the best interests of our entire industry," the studios' statement said.

"It is now absolutely clear that the WGA's organizers are determined to advance their own political ideologies and personal agendas at the expense of working writers and every other working person who depends on our industry for their livelihoods."

While the main issues on the table involved how much writers would be paid when their work is distributed through new media -- including DVDs and the Internet -- the latest impasse was apparently triggered by WGA demands that it be given jurisdiction over the growing production of reality shows and animation.

The chairman of the WGA's negotiating committee, John Bowman, said that when the studios' negotiator, Nick Counter, walked out of talks he delivered "a total rejection of our proposal on Internet streaming" and an ultimatum about the other demands.

Bowman said Counter told him the studios would not return until the guild took those demands -- and another to base Internet residuals on a distributor's gross profits -- off the table.

"This would require us to concede most of our Internet proposal as a precondition for continued bargaining," Bowman said. "The AMPTP insists we let them do to the Internet what they did to home video."

While Bowman indicated the WGA negotiators would not give in to the ultimatum, he said they "remain ready and willing to negotiate, no matter how intransigent our bargaining partners are, because the stakes are simply too high."

"We were prepared to counter their proposal tonight, and when any of them are ready to return to the table, we're here, ready to make a fair deal," Bowman said.

Scriptwriters put down their pens and hit the picket lines on November 5 after failing to reach agreement on a contract to replace the one that expired two days earlier

LONDON, England (CNN) -- Rupert Murdoch is stepping down from his role as chairman of the British broadcaster BSkyB to make way for his son James, long seen as the tycoon's favored successor to take over his media empire.


James Murdoch's tenure at British Sky Broadcasting was viewed as a success.

James Murdoch, who has been appointed non-executive chairman of BSkyB, will also head up the Asian and European operations of News Corporation -- the parent company, News Corp. said in a statement Friday.

Murdoch will remain as CEO of News Corp., the world's third largest media conglomerate after Disney and Time Warner.

Based in New York, News Corp. also owns the Fox network, which includes Fox News, as well as broadcasters and newspapers around the world, including the Times and Sun newspapers in Britain.

It recently acquired the Wall Street Journal and is in the process of the completing a takeover of the paper's parent company, Dow Jones.

Murdoch, who is also resigning as a director of BSkyB, is believed to be keen to hand over the reigns of his business empire to his son.

"James is a talented and proven executive with a rare blend of international perspective and deep, hands-on experience in improving operational results," Murdoch was quoted as saying in the statement.

As the CEO of BskyB for the last four years, James Murdoch, 34, is considered to have done a good job. His role in charge of News Corp.'s European and Asian assets will also give him control of Sky Italia and the Star TV network in Asia.

The appointment of James Murdoch, who will step down as CEO of BskyB, was made following consultations with major shareholders, News Corp. said.

In a separate move, Les Hinton -- a respected figure in the British newspaper market -- has been appointed the new CEO of Dow Jones.

Hinton, current executive chairman of News International, the holding company for the Times, Sunday Times, Sun and News of the World newspapers, has been a huge influence on the British newspaper empire and plays a key role in appointing editors and deciding strategy.

According to the British newspaper the Guardian, News Corp. is also expected to announce that Robert Thomson, the editor of the Times, will move to New York to become publisher of the Wall Street Journal.

I have been writing a lot about America's quarter-century economic boom. Now CNBC's Larry Kudlow and former Labor Secretary Robert Reich both give their two cents on the long-term performance of the economy from very different perspectives. Here is a bit of how Kudlow sees the past 25 years:

A significant paradigm shift has taken place in the U.S. economy over the last quarter century. During that time, the U.S. economy has been in prosperity 95 percent of the time and in recession only 5 percent. That is, the United States has had a grand total of only five negative GDP quarters in the past 25 years. In the prior two decades, the U.S. economy was mired in recession about a third of the time. This earlier period was a time marked by high inflation, high taxes, and overregulation of the economy. This caused the U.S. to look weak, while the Soviet Union looked strong. Clearly, things have changed. Prosperity has become the rule, not the exception...

Now it's Reich's turn:

According to new polls, the economy is the number 1 issue for American voters. But that's not just because the economy is slowing and mortgages are harder to come by. The real reason is middle-class families have exhausted the coping mechanisms they've used for over three decades to get by on median wages that are barely higher than they were in 1970, adjusted for inflation. Male wages today are actually lower than they were then; the income of a young man in his 30s is now 12 percent below that of a man his age three decades ago... The underlying problem began around 1970. And any presidential candidate seeking to address it will have to think bigger than stimulating the economy with tax cuts or spending increases. The fact is, most Americans are still not prospering in the high-tech, global economy that emerged three decades ago. Almost all the benefits of economic growth since then have gone to a relatively small number of people at the very top.

My take: Not surprisingly, perhaps, I think Kudlow plays A-Rod on this one and hits a moon-shot home run. One problem with Reich's argument is that government stats have been overstating inflation for years. Many economists on the left and right believe this. If you slightly tweak the inflation numbers for the past two decades or so, you see that real wages and income have gone up by 40 percent rather than slipped. I call this the "myth of stagnant wages." From another vantage point, a recent study from the Federal Reserve Bank of Minneapolis finds that wages for the median worker went up by 20 percent between 1975 and 2005.

What's more, critics of the economy tend to ignore benefits when figuring how well or poorly workers are being paid. By that measure, according to the Fed bank, total compensation has gone up by 28 percent. Common sense also leads one to believe Reich is wrong. If he were correct, one would expect to have seen a massive populist political backlash years ago. Instead, people keep electing presidents with fairly conservative economic views who focus on growth rather than redistribution. Where are Presidents Mondale, Dukakis, and Gephardt? But where Reich, Kudlow, and the Fed study would all agree is that America can do even better in the future if we focus on policies that enhance economic growth.

How can automakers make more fuel-efficient cars, as Congress is aiming to force them to do? The best rundown of the technology, and an analysis of how much it's going to cost you—or more likely, how much it will benefit you—is in a 244-page decision handed down this past September by a federal judge in Vermont.

Judge William K. Sessions was not ruling on the Corporate Average Fuel Economy law that Congress is about to overhaul, but on a parallel development that could become just as significant: California's effort, which could turn out to have the force of law across the country, to force carmakers to limit their greenhouse gas emissions. The easy way carmakers can cut carbon dioxide is by getting more miles per gallon, so the judge's look at the technology is relevant to CAFE.

The short version is that the judge agreed with California's expert witness, who estimated that the initial increased vehicle cost for consumers would be about $1,500. Not only would this be offset by about $5,000 in fuel savings over the car's lifetime, if fuel is $3 per gallon, but the judge said it is likely the premium would be only temporary. "The automobile industry has historically been very effective at improving the quality of necessary technology while decreasing its cost," he said. Sessions said the estimate by the automakers' expert witness, that more fuel efficiency would cost consumers $5,000 per car, was inflated because he had not considered these already available technologies:

• Gasoline direct injection/turbo. Allows a four-cylinder to replace a six-cylinder engine without significant sacrifice of power. Already popular in Europe. About 12 percent fuel economy improvement possible.

• Camless valve actuation. The valve motion is controlled by electrical or hydraulic energy instead of a camshaft mechanism. About 12 percent improvement possible.

• Tires with lower rolling resistance. A very low-cost option. Although it must be balanced with the need for traction, the National Academy of Sciences says a 1 to 15 percent improvement is possible.

• Reducing aerodynamic drag. Even the automakers' expert said it was an "almost zero cost" method, but he argued consumers would reject a more aerodynamic look. California's expert pointed out that small detail changes can make a big difference, which is why the large, square Lexus LS 460 is more aerodynamic than many cars on the market.

• Continuously variable transmission. An infinite range of gear ratios, as opposed to the usual four to six, improves power transmission efficiency. Already in use; one of the reasons the 2007 Nissan Altima has highest horsepower and fuel economy in its class. A 6 percent fuel economy increase is possible.

As environmental consultant Dan Becker said this week, "This is auto mechanics, not rocket science." Congressional vote-counters say that both the House and the Senate have the support to lift CAFE standards in votes they have planned this week, but this is Washington, after all, and the effort might still fail. It's wrapped up in a big energy bill that would also increase use of wind, solar, and other renewable energy for electricity, and the Senate GOP has vowed to filibuster and President Bush has threatened a veto. As usual, Gristmill is following this closely and has the likely veto letter here. Stay tuned to see if the Democratic leadership can hold together an effort to raise fuel-efficiency standards to an average 35 miles a gallon by 2020, the first increase in 30 years.

Over the past week, I've attended two heated discussions on the future of the credit card industry. The first, last Friday, was hosted by the Consumer Federation of America, and the second, Tuesday, was a Senate hearing on credit card interest rates.

The arguments are basically over whether credit card companies treat their customers fairly. Consumer rights groups and certain members of Congress, such as Sens. Carl Levin and Claire McCaskill, Democrats from Michigan and Missouri respectively, think credit card companies are unfair in the aggressive way they solicit customers and then raise interest rates when customers start to struggle with their debt.

As McCaskill put it, "It seems part of the problem is that the behavior you encourage is the behavior you use to raise interest rates." (McCaskill has personal knowledge of the problems with this system: Even after the senator closed one of her mother's credit card accounts, her mother received blank checks from the company in the mail.)

On the other side of the debate, credit card providers argue that without the ability to raise rates on those with high risk factors, they may have to raise rates on all customers to offset the losses from that group, or stop offering credit to some people altogether.

The thing that strikes me about this debate is how often we consumers are talked about as if our minds are barely functioning. One woman, who identified herself as an employee of the Washington, D.C., government, stood up at the Consumer Federation of America meeting and suggested that card companies put the following warning, written in large lettering, on all of their statements: "If you use credit cards, you could end up in major debt." As one woman whispered to her friend behind me, "That's like writing on candy, 'Eating sugar may rot your teeth.'"

We don't need such obvious statements. We just need some basic facts. For example, how much am I paying each month in interest? What will cause my interest rate to go up, and how will I be notified if it does? What fees am I paying, and why? Without that information, a customer can suddenly find herself paying 24 percent interest, as Janet Hard testified she did with her Discover card. Her interest rate ballooned even after she made her Discover payments on time, partly because her credit score had declined and Discover deemed her a credit risk. Had she known about the interest rate hike, she could have closed her account in advance of it. (Credit card companies do often disclose this information somewhere, but it tends to be in an unintelligible form or in small print that's easily missed.)

Customers aren't stupid. We just need to be informed of how companies plan to treat us before deciding where to spend our money.

Please leave your own comments on the credit card debate below.