Jack Reed

Mr. REED

Mr. REED. Yes.

Mr. REED. The Senator's understanding is correct. My reading of the legislation would allow certain discussions about environmental standards, along with other standards, if they directly related to trade. But they would not provide the President with the instructions, the support, and the direction to go out there and make environmental quality in these foreign countries a centerpiece, an important part of our negotiations.

Mr. REED. I think that's right. Again, I think it's probably not even that clear in terms of what they can do because, essentially, as I read the restrictive language directly related to trade, it could be read to simply say that we have a product, for example, that we are sending in with a label on it, and if the country objects to it or wants more labeling, then we can say, well, that is impermissible. But as far as whether they have pretreatment of their waste, as far as whether the respirators in their factories, as far as whether they have environmental standards--air quality and water quality--that seems to be totally off the table. But that is what impacts on the quality of the workplace. Also, it is an inducement for capital to go from our country into these countries because, essentially, they are avoiding costs. The Senator probably was contacted, like I was, by individuals concerned about the proposed ambient air quality regulations in the United States. Some representatives of major companies have bluntly told me, ``If these pass, we are going to Mexico. They don't have these ambient air quality standards, and we will avoid millions of dollars in costs. We will just move out.'' Now, that might simply be a bluffing tactic, a negotiating ploy to try to stop these regulations. But at some point, if we continue to try to have a clean and healthy and safe environment, these costs add up and companies can avoid them by going elsewhere.

Mr. REED. Yes.

Mr. REED. The Senator is exactly right, in my view. Let me add another point that I think is very important. We have talked about the inducements for capital investment because of low environmental quality around the world. We have talked about the effects on working men and women who are there in those factories in Ho Chi Minh City, Malaysia, throughout the East, and in Mexico. I suggest that this has a real impact in our own home communities, such as Baltimore, MD, and Providence, RI, where small business men and women are struggling to apply the environmental quality standards that we all passed and they agree with. We all see the benefits to our society and culture, but it is detrimental to their economic viability versus these countries across the sea. There is another factor, too. Just a few weeks ago, Senator Hagel and Senator Byrd came before this Senate with a resolution, Senate Resolution 98. It essentially said that we are not going to tolerate an environmental regime internationally that puts the burden of remediation and cleanup on the United States to the detriment of our economy. We are going to demand that developing countries also stand up and share the burden of cleaning up the environment. It passed with overwhelming support. It seems just common sense that, of course, we are not going to prejudice ourselves in an international regime by saying we will add further burdens to us, as the developing world keeps spewing out bad air, polluting the waters, et cetera. But in trade agreements, which are the focal point of most of our strong, bilateral and multinational relationships, we have completely ignored that point. So, on one hand, we are saying we have to get tough with these countries down there and make them start cleaning up their environment. But when it comes to the point where the rubber meets the road, where we are negotiating, we have leverage, and we want them to change behavior, we say it is not important. We are talking out of both sides of our mouth.

Mr. REED. Yes.

Mr. REED. I am equally amazed--if I may reclaim my time --by leaving this out. Certainly the jewelry manufacturers in Rhode Island would say, ``Put it in because I want them to clean their waste like I have to.'' Working men and women who have seen jobs lost because companies moved out of their communities would say, put it in. But my suspicion is that many people who are promoting this legislation are supportive of those multinational corporations who say: Listen, we want to avoid environmental policy because we want to get our production out of the United States and get into these countries, and we don't want them to have tough environmental standards.

Mr. REED. Yes.

Mr. REED. Again, I indicate that the Senator, I think, is absolutely right. Let me give an example within the text of the agreement. Part of the negotiating objectives is to develop internationally agreed rules, including settlement procedures, which are consistent with the commercial policies of the United States. So when it comes to commercial law, dispute resolution, we want our American laws down there because they are balanced, fair, they work, are effective, and are comfortable to the investors going to these countries. I daresay, if we tried to substitute our ideas consistent with the environmental policy of the United States, we would draw the unalloyed opposition of the proponents of the fast-track procedure. In our view, I believe environmental quality is one important factor in terms of economic competition between our country and other countries. So, in effect, I think you are right. I think that the thrust of this agreement is that it is unbalanced. You and I--I will speak for myself--we believe that we have to have sensible rules about investment. We have certain guarantees that our investors are protected. We have to have protection for intellectual property. We have to have protections for dispute settlement. We certainly don't want to have a situation where American companies go into a foreign land, make investments, and then can't repatriate their profits or, in fact, go to court and solve commercial disputes. That is fine. But we have to take the next step. We also have to negotiate with those countries so that their environmental policies are not inconsistent with ours and at least move toward an international standard.

Mr. REED. The Senator from Maryland is absolutely correct. Recognize that the major international environmental issues which we face--not alone, but collectively as a world community--are significant: global climate change, which we were talking about recently; ozone depleting substances, which have affected all of us around the world; reduction in ship pollution of the ocean; international ocean dumping; transboundary movement of hazardous waste materials and disposal. What happens to all of this waste in countries where it is being produced? How does it move from one country to another? All of these are critical issues. Yet, within a context and scope of this fast track agreement, they would be relegated, as the Senator from Maryland said, to side agreements at best. Our experience has been such that these side agreements are ineffectual in most cases, if not all cases. If we put them in the center of our concerns as a negotiating objective, not only will we make progress on these issues, but we will send a strong signal to all of our potential trading partners that they have to be prepared to come to the table and talk turkey about the environment and about how they will improve their environmental quality. That will result not only in a cleaner environment, which is an extremely noble objective and one that has very practical ramifications, but it will also help level that competitive playing field between those small businesspeople up in Rhode Island and Baltimore who are doing it already. All they ask us is to ensure, as we enter the world of international trade, that we try our best to bring up the standards of their competitors because they are their competitors. If we do that, then we leave it to them, their ingenuity, their imagination, and their skill to win the trade battle. But essentially what we are doing today by taking those off the table is we are effectively dooming thousands of small businesses across this country to extinction.

Mr. REED. I again agree wholeheartedly with the Senator. It is a situation in which, when we go to table, we have direct one-on-one negotiations, when we have as our leverage more liberal entry into our market, the largest market in the world, when we in fact have all of the force and the power behind these types of negotiations, we simply say we are not interested in the environment. Yet, when we go to international conferences, we say how not only must we all collectively clean up the environment, this Senate weeks ago said, by the way, the developing world, the world which will be the parties to the bilateral agreements, they must do their share because we can't do it alone.

Mr. REED. Again, the Senator is absolutely perceptive about these particular issues. I noted before the article in today's New York Times about Nike and Vietnam and one of the officers of Nike indicated that the factory that was inspected was ``among the most modern in the world,'' in fact directly competitive, ``but there are a lot of things they could get better,'' according to the spokesman. But the point the Senator makes is well taken. This is not some old rattrap that was built in the 1930's and has some ad hoc machines there. This is a modern facility. It is a modern facility, the best technology to produce footwear, but it is obvious from this report no thought or concern was there to protect the workers to do the things we insist must be done in our factories. So the Senator is absolutely right. So far as the new machines to make the product cheaper, better, faster, of higher quality, they are there, but all of the other concerns that go to the bottom line of any company, environmental quality being a major one, they can be avoided, and that is what we are facing. I believe that unless we elevate environmental considerations to a major negotiating objective, not only will we see the further deterioration of the world's environment, not only will we be in a situation where we go to international conferences with the rest of world asking us to do more and more and more to raise our standards, making us less competitive, we are going to see the impact in our trade balance dramatically and directly. This is not about altruism alone. This is not about ecopolitics. This is not about sensitivity to the environment alone. It is all of those things, but it is something else. It is something about having a system of trade laws which recognizes the important bottom line impact of environmental quality here and with respect to our trading partners. I yield the floor. Mr. WARNER addressed the Chair.

Mr. REED. Mr. President, if I may briefly comment upon the amendment. First, I recognize certainly the strong commitment of the Senator from Delaware to environmental quality in the United States. Indeed, because of his commitment and the commitment of many of my colleagues, we have environmental laws which are significant, which provide for high quality in our country. But the problem is that our foreign competitors do not have anything close to these laws in many, many countries, particularly countries with which we are endeavoring to establish bilateral trade relationships. I agree with the Senator that the purpose of the fast-track procedure is to conform our laws to the negotiated results that the President achieves with our trading partners. I also believe and concur with the Senator that there is no attempt to lower or diminish our environmental laws. Simply stated, what my amendment would do is ask the President to go out and try to bring up, as best he can, foreign environmental laws to our laws. So, in effect, we would be asking him to go out and take what we have done in the United States and try to apply it to another country, not simply because of its decency, its correctness in an intellectual way, but because of its profound impact in the pattern of trade between our country and other countries of the world. It is interesting in other areas of this underlying legislation, we are quite specific in directing the President to do just that: go out and bring up the laws of our potential trading partners to our level. For example, in the section with respect to trade in services, we quite specifically direct the President to ``develop internationally agreed rules, including dispute settlement procedures, which are consistent with the commercial policies of the United States.'' I would be very happy if we had language like this that would say bring it up to the environmental policies of the United States. That is the point that I am trying to make. I would be very happy if we changed not one environmental law of the United States pursuant to fast track, that we did not try to diminish or decrease any of our environmental laws, but we simply ask the President to try to bring up their standards somewhere near to our standards. Not only would I be happy but, again, returning to the very strong, in my mind, analogy to my home State, I would be very happy if I could go back to my jewelry manufacturers--these are small companies; many of them have family connections over long, long periods of time where fathers and mothers have passed it on to sons and daughters--I would be very happy if I could tell them our fast-track agreement has resulted in increased environmental standards so that they are not exactly like the United States, but no longer will you have to provide pretreatment of your wastewater and then see competitors around the world simply dumping raw solvents into municipal wastewater systems. Not only would you have to provide ventilation for your workers, but other entrepreneurs will have to try to do the same thing. If we do that, I don't think it is violative of the spirit or the letter of fast track, but it will produce a much more even, competitive playing field for our manufacturers versus our potential trading partners. So I, again, urge that the Senate adopt this amendment that would move environmental quality to the center of negotiations as a principal negotiating objective, not because it is an altruistic noble goal alone, but because it impacts dramatically on the bottom line of American companies and foreign companies and, in that sense, should be part of our trading policy, should be a key goal which our President is seeking to achieve in any negotiations. I yield the floor. Mr. ROTH addressed the Chair.

Mr. REED. Will the Senator yield?

Mr. REED. I understand the Senator's point--it is very well taken-- about the procedures. In a sense, it might prove too much. The idea that we can do things outside of fast track raises or begs the question why we do certain things within fast track. Why, for example, are we saying let's make foreign laws with respect to commercial practices consistent with our laws, when, in fact, when it comes to the environment, we are saying, ``Oh, no, don't include environment in this same context''? I think perhaps the logic might be that some people either feel the environment is not important to international trade--and I think our discussions tonight should have indicated it is very important, indeed crucial--or others are simply saying we want a trade agreement, an arrangement with a foreign country which will allow us all the benefits of commercial practice in the United States, all the protection of intellectual property laws, all the protections for capital investment but none of the burdens, if you will, of high-quality environmental laws. Again, I just can't understand, with respect, why we can't include environmental conditions as we have otherwise.

Mr. REED. That is correct.

Mr. REED

Mr. REED. Mr. President, I am pleased to support the ``Haffenreffer Museum Restoration Act of 1997'', legislation that Senator Chafee and I introduced to assist in the relocation and expansion of Rhode Island's Haffenreffer Museum of Anthropology. Currently situated in Bristol, R.I., the Haffenreffer Museum is home to one of our Nation's finest collections of Native American and other cultural artifacts from around the world. Each year, thousands of visitors enjoy the Haffenreffer's exhibits and benefit from its commitment to education, which is a tribute to the museum's close ties to the Brown University Department of Anthropology. Recognizing this effective combination, the American Association of Museums has described the Haffenreffer as a ``superb medium-small facility with outstanding collections, excellent exhibits, and a superb program of public education and outreach.'' In an effort to increase access to the Haffenreffer's resources, Brown University has begun preparations to relocate the museum to Providence, R.I. Toward this end, the university has acquired two structures on the National Register of Historic Places, the Old Stone Bank Building and the Benoni-Cooke House, to house the Haffenreffer in downtown Providence. This move would preserve these historically significant buildings, while contributing to the resurgence of Providence by adding a nationally renowned museum to its growing arts and entertainment district. The new site would also allow the Haffenreffer to display more of its collection for visitors, whom the museum estimates would increase fivefold after the relocation. This development would particularly serve children, who currently make up more than half of the museum's visitors and for whom the downtown location would be more accessible. Brown University is raising funds to restore and expand the Old Stone Bank Building and the Benoni-Cooke House, and to complete the relocation of the Haffenreffer's collection to Providence by the year 2000. The bill before the Senate today authorizes Federal cooperation in advancing these goals, increasing knowledge of Native American history, preserving architectural treasures, and promoting the revitalization of our Nation's downtown areas. I urge my colleagues to support this bill and the work needed to bring the Haffenreffer to Rhode Island's capital city.

Mr. REED

Mr. REED. Mr. President, I rise today to make a few comments concerning legislation which I am introducing to deal with the problem of slamming. Earlier this year, I outlined the remedies necessary to deal with this serious consumer problem in a Sense of the Senate Resolution which was amended to the Commerce State Justice Appropriations legislation. The legislation I introduce today embodies those remedies. I would like to take a moment to thank Ranking Member Hollings and Chairmen McCain and Burns for the assistance they have lent to me on this issue. Telephone ``slamming'' is the illegal practice of switching a consumer's long distance service without the individual's consent. This problem has increased dramatically over the last several years, as competition between long distance carriers has risen. Slamming is the top consumer complaint lodged at the Federal Communications Commission (FCC), with 11,278 reported complaints in 1995, and 16,500 in 1996. In the first nine months of 1997 alone, 15,000 complaints have been filed. Unfortunately, this represents only the tip of the iceberg because most consumers never report violations to the FCC. One regional Bell company estimates that 1 in every 20 switches is fraudulent. Media reports indicate that as many as 1 million illegal transfers occur annually. Thus, slamming threatens to rob consumers of the benefit of a competitive market, which is now composed of over 500 companies which generate $72.5 billion. As a result of slamming, consumers face not only increased phone bills, but also the significant expenditure of time and energy in attempting to identify and reverse the fraud. The results of slamming are clear: higher phone bills and immense consumer frustration. Mr. President, we are all aware of the stiff competition which occurs for customers in the long distance telephone service industry. The goal of deregulating the telecommunications industry was to allow consumers to easily avail themselves of lower prices and better service. Hopefully, this option will soon be presented to consumers for in-state calls and local phone service. Indeed, better service at lower cost is a main objective of those who seek to deregulate the utility industry. Unfortunately, fraud threatens to rob many consumers of the benefits of a competitive industry. Telemarketing is one of the least expensive and most effective forms of marketing, and it has exponentially expanded in recent years. By statute, the Federal Trade Commission (FTC) regulates most telemarketing, prohibiting deceptive or abusive sales calls, requiring that homes not be called at certain times, and that companies honor a consumer's request not to be called again. The law mandates that records concerning sales be maintained for two years. While the FTC is charged with primary enforcement, the law allows consumers, or state Attorneys General on their behalf, to bring legal action against violators. Yet, phone companies are exempt from these regulations, since they are subject to FCC regulation. While the FCC has brought action against twenty-two of the industry's largest and smallest firms for slamming violations with penalties totaling over $1.8 million, this represents a minute fraction of the violations. FCC prosecution does not effectively address or deter this serious fraud. To date, state officials have been more aggressive in pursuing violators. The California Public Utility Commission fined a company $2 million earlier this year after 56,000 complaints were filed against it. Arizona, Arkansas, Idaho, Illinois, Kansas, Minnesota, Mississippi, Missouri, New Jersey, Ohio, Vermont, and Wisconsin have all pursued litigation against slammers. Earlier this summer, public officials of twenty-five states asked the FCC to adopt tougher rules against slammers. As directed by the Telecommunications Act of 1996, the FCC has recently moved to close several loopholes which have allowed slamming to continue unabated. Most importantly, the FCC has proposed to eliminate the financial incentive which encourages many companies to slam by mandating that all revenues generated from an illegal switch be returned to the original carrier. At present, a slammer can retain the profits generated from an illegal switch. Additionally, the FCC proposed regulations would require that a carrier confirm all switches generated by telemarketing through either (1) a letter of agency, known as a LOA, from the consumer; (2) a recording of the consumer verifying his or her choice on a toll free line provided by the carrier; or (3) a record of verification by an appropriately qualified and independent third party. The regulations are expected to be finalized by the FCC early in 1998. While this represents a start, I believe that these remedies will be wholly inadequate to address the ever-increasing problem of slamming. The problem is that slammed consumers would still be left without conclusive proof that their consent was properly obtained and verified. My legislation encompasses a three part approach to stop slamming by strengthening the procedures used to verify consent obtained by marketers; increasing enforcement procedures by allowing citizens or their representatives to pursue slammers in court with the evidence necessary to win; and encouraging all stakeholders to use emerging technology to prevent fraud. Mr. President, let me also thank the National Association of Attorneys General, the National Association of Regulatory Utility Commissioners which through both their national offices and individual members provided extensive recommendations to improve this bill. Additionally, I have found extremely helpful the input of several groups which advocate on behalf of consumers. I was particularly pleased to work with the Consumer Federation of America to address concerns which its members expressed, and I am honored that this legislation has received the endorsement of their organization. Mr. President, let me take a few minutes to outline the specific provisions of my bill. My legislation requires that a consumer's consent to change service is verified so that discrepancies can be adjudicated quickly and efficiently. Like the 1996 Act, my bill requires a legal switch to include verification. However, my legislation enumerates the necessary elements of a valid verification. First, the bill requires verification to be maintained by the provider, either in the form of a letter from the consumer or by recording verification of the consumer's consent via the phone. The length that the verification must be maintained is to be determined by the FCC. Second, the bill stipulates the form that verification must take. Written verification remains the same as current regulations. Oral verification must include the voice of the subscriber affirmatively demonstrating that she wants her long distance provider to be changed; is authorized to make the change; and is currently verifying an imminent switch. The bill mandates oral verification to be conducted in a separate call from that of the telemarketer, by an independent, disinterested party. This verifying call must promptly disclose the nature and purpose of the call. Third, after a change has been executed, the new service provider must send a letter to the consumer, within five business days of the change in service, informing the consumer that the change, which he requested and verified, has been effected. Fourth, the bill mandates that a copy of verification be provided to the consumer upon request. Finally, the bill requires the FCC to finalize rules implementing these mandates within nine months of enactment of the bill. These procedures should help ensure that consumers can efficiently avail themselves of the phone service they seek, without being exposed to random and undetectable fraudulent switches. If an individual is switched without his or her consent, the mandate of recorded, maintained verification will provide the consumer with the proof necessary to prove that the switch was illegal. The second main provision of my legislation would provide consumers, or their public representatives, a legal right to pursue violators in court. Following the model of Senator Hollings' 1991 Telephone Consumer Protection Act, my bill provides aggrieved consumers with a private right of action in any state court which allows, under specific slamming laws or more general consumer protection statutes such an action. The 1991 Act has been adjudicated to withstand constitutional challenges on both equal protection and tenth amendment claims. Thus, the bill has the benefit of specifying one forum in which to resolve illegal switches of all types of service: long distance, in-state, and local service. Realizing that many individuals will not have the time, resources, or inclination to pursue a civil action, my bill also allows state Attorneys Generals, or other officials authorized by state law, to bring an action on behalf of citizens. Like the private right of action in suits brought by public officials damages are statutorily set at $1,000 or actual damages, whichever is greater. Treble damages are awarded in cases of knowing or willful violations. In addition to monetary awards, states are entitled to seek relief in the form of writs of mandamus, injunction, or similar relief. To ensure a proper role for the FCC, state actions must be brought in a federal district court where the victim or defendant resides. Additionally, state actions must be certified with the Commission, which maintains a right to intervening in an action. The bill makes express the fact that it has no impact on state authority to investigate consumer fraud or bring legal action under any state law. Finally, Mr. President, my legislation recognizes that neither legislators nor regulators can solve tomorrow's problems with today's technology. Therefore my bill mandates that the FCC provide Congress with a report on other, less burdensome but more secure means of obtaining and recording consumer consent. Such methods might include utilization of Internet technology or issuing PIN numbers or customer codes to be used before carrier changes are authorized. The bill requires that the FCC report to Congress on such methodology by December 31, 1999. Mr. President, I appreciate the opportunity to discuss my initiative to stop slamming. I hope that this issue can be addressed quickly. As a result, I would urge all my colleagues to cosponsor this legislation.

Mr. REED

Mr. REED. Mr. President, I rise today to make a few comments concerning legislation which I am introducing to deal with the problem of slamming. Earlier this year, I outlined the remedies necessary to deal with this serious consumer problem in a Sense of the Senate Resolution which was amended to the Commerce State Justice Appropriations legislation. The legislation I introduce today embodies those remedies. I would like to take a moment to thank Ranking Member Hollings and Chairmen McCain and Burns for the assistance they have lent to me on this issue. Telephone ``slamming'' is the illegal practice of switching a consumer's long distance service without the individual's consent. This problem has increased dramatically over the last several years, as competition between long distance carriers has risen. Slamming is the top consumer complaint lodged at the Federal Communications Commission (FCC), with 11,278 reported complaints in 1995, and 16,500 in 1996. In the first nine months of 1997 alone, 15,000 complaints have been filed. Unfortunately, this represents only the tip of the iceberg because most consumers never report violations to the FCC. One regional Bell company estimates that 1 in every 20 switches is fraudulent. Media reports indicate that as many as 1 million illegal transfers occur annually. Thus, slamming threatens to rob consumers of the benefit of a competitive market, which is now composed of over 500 companies which generate $72.5 billion. As a result of slamming, consumers face not only increased phone bills, but also the significant expenditure of time and energy in attempting to identify and reverse the fraud. The results of slamming are clear: higher phone bills and immense consumer frustration. Mr. President, we are all aware of the stiff competition which occurs for customers in the long distance telephone service industry. The goal of deregulating the telecommunications industry was to allow consumers to easily avail themselves of lower prices and better service. Hopefully, this option will soon be presented to consumers for in-state calls and local phone service. Indeed, better service at lower cost is a main objective of those who seek to deregulate the utility industry. Unfortunately, fraud threatens to rob many consumers of the benefits of a competitive industry. Telemarketing is one of the least expensive and most effective forms of marketing, and it has exponentially expanded in recent years. By statute, the Federal Trade Commission (FTC) regulates most telemarketing, prohibiting deceptive or abusive sales calls, requiring that homes not be called at certain times, and that companies honor a consumer's request not to be called again. The law mandates that records concerning sales be maintained for two years. While the FTC is charged with primary enforcement, the law allows consumers, or state Attorneys General on their behalf, to bring legal action against violators. Yet, phone companies are exempt from these regulations, since they are subject to FCC regulation. While the FCC has brought action against twenty-two of the industry's largest and smallest firms for slamming violations with penalties totaling over $1.8 million, this represents a minute fraction of the violations. FCC prosecution does not effectively address or deter this serious fraud. To date, state officials have been more aggressive in pursuing violators. The California Public Utility Commission fined a company $2 million earlier this year after 56,000 complaints were filed against it. Arizona, Arkansas, Idaho, Illinois, Kansas, Minnesota, Mississippi, Missouri, New Jersey, Ohio, Vermont, and Wisconsin have all pursued litigation against slammers. Earlier this summer, public officials of twenty-five states asked the FCC to adopt tougher rules against slammers. As directed by the Telecommunications Act of 1996, the FCC has recently moved to close several loopholes which have allowed slamming to continue unabated. Most importantly, the FCC has proposed to eliminate the financial incentive which encourages many companies to slam by mandating that all revenues generated from an illegal switch be returned to the original carrier. At present, a slammer can retain the profits generated from an illegal switch. Additionally, the FCC proposed regulations would require that a carrier confirm all switches generated by telemarketing through either (1) a letter of agency, known as a LOA, from the consumer; (2) a recording of the consumer verifying his or her choice on a toll free line provided by the carrier; or (3) a record of verification by an appropriately qualified and independent third party. The regulations are expected to be finalized by the FCC early in 1998. While this represents a start, I believe that these remedies will be wholly inadequate to address the ever-increasing problem of slamming. The problem is that slammed consumers would still be left without conclusive proof that their consent was properly obtained and verified. My legislation encompasses a three part approach to stop slamming by strengthening the procedures used to verify consent obtained by marketers; increasing enforcement procedures by allowing citizens or their representatives to pursue slammers in court with the evidence necessary to win; and encouraging all stakeholders to use emerging technology to prevent fraud. Mr. President, let me also thank the National Association of Attorneys General, the National Association of Regulatory Utility Commissioners which through both their national offices and individual members provided extensive recommendations to improve this bill. Additionally, I have found extremely helpful the input of several groups which advocate on behalf of consumers. I was particularly pleased to work with the Consumer Federation of America to address concerns which its members expressed, and I am honored that this legislation has received the endorsement of their organization. Mr. President, let me take a few minutes to outline the specific provisions of my bill. My legislation requires that a consumer's consent to change service is verified so that discrepancies can be adjudicated quickly and efficiently. Like the 1996 Act, my bill requires a legal switch to include verification. However, my legislation enumerates the necessary elements of a valid verification. First, the bill requires verification to be maintained by the provider, either in the form of a letter from the consumer or by recording verification of the consumer's consent via the phone. The length that the verification must be maintained is to be determined by the FCC. Second, the bill stipulates the form that verification must take. Written verification remains the same as current regulations. Oral verification must include the voice of the subscriber affirmatively demonstrating that she wants her long distance provider to be changed; is authorized to make the change; and is currently verifying an imminent switch. The bill mandates oral verification to be conducted in a separate call from that of the telemarketer, by an independent, disinterested party. This verifying call must promptly disclose the nature and purpose of the call. Third, after a change has been executed, the new service provider must send a letter to the consumer, within five business days of the change in service, informing the consumer that the change, which he requested and verified, has been effected. Fourth, the bill mandates that a copy of verification be provided to the consumer upon request. Finally, the bill requires the FCC to finalize rules implementing these mandates within nine months of enactment of the bill. These procedures should help ensure that consumers can efficiently avail themselves of the phone service they seek, without being exposed to random and undetectable fraudulent switches. If an individual is switched without his or her consent, the mandate of recorded, maintained verification will provide the consumer with the proof necessary to prove that the switch was illegal. The second main provision of my legislation would provide consumers, or their public representatives, a legal right to pursue violators in court. Following the model of Senator Hollings' 1991 Telephone Consumer Protection Act, my bill provides aggrieved consumers with a private right of action in any state court which allows, under specific slamming laws or more general consumer protection statutes such an action. The 1991 Act has been adjudicated to withstand constitutional challenges on both equal protection and tenth amendment claims. Thus, the bill has the benefit of specifying one forum in which to resolve illegal switches of all types of service: long distance, in-state, and local service. Realizing that many individuals will not have the time, resources, or inclination to pursue a civil action, my bill also allows state Attorneys Generals, or other officials authorized by state law, to bring an action on behalf of citizens. Like the private right of action in suits brought by public officials damages are statutorily set at $1,000 or actual damages, whichever is greater. Treble damages are awarded in cases of knowing or willful violations. In addition to monetary awards, states are entitled to seek relief in the form of writs of mandamus, injunction, or similar relief. To ensure a proper role for the FCC, state actions must be brought in a federal district court where the victim or defendant resides. Additionally, state actions must be certified with the Commission, which maintains a right to intervening in an action. The bill makes express the fact that it has no impact on state authority to investigate consumer fraud or bring legal action under any state law. Finally, Mr. President, my legislation recognizes that neither legislators nor regulators can solve tomorrow's problems with today's technology. Therefore my bill mandates that the FCC provide Congress with a report on other, less burdensome but more secure means of obtaining and recording consumer consent. Such methods might include utilization of Internet technology or issuing PIN numbers or customer codes to be used before carrier changes are authorized. The bill requires that the FCC report to Congress on such methodology by December 31, 1999. Mr. President, I appreciate the opportunity to discuss my initiative to stop slamming. I hope that this issue can be addressed quickly. As a result, I would urge all my colleagues to cosponsor this legislation.

Mr. REED

Mr. REED. Madam President, I am here today to comment once again on not only the fast-track agreement but also the overall context of U.S. trading. The discussion between the Senator from Maryland and the Senator from New York pointed out the complexity of looking at the trade deficit. But there are some things that are quite clear despite the complexity. In 1980, we had a surplus of roughly $2.3 billion. By 1996--we have now a deficit of $165 billion. That is the time in which fast track has been operative. That is the time in which fast track has been the centerpiece of our legislative efforts, our international efforts to increase trade in the world. This deficit right now is a result of many things. It is a result of, in some respects, our fast-track policy. But it is a result also of our inability, I think, to deal with some of the more basic issues in international trade, dealing with some countries that utilize access to our market but at the same time deny us access to their market. It is a phenomenon also caused by the proliferation of multinational corporations that move their operations, in many cases, out of the United States because of our environmental laws, because of our labor laws, because of many stringent requirements that raise and maintain the quality of life and the standard of living here in the United States. And they have gone to other countries. In fact, some of our policies have encouraged their departure. One of the striking differences between this fast-track bill today, 1997, and the fast-track bill that was adopted in 1988, is that we have neglected to include within the principal negotiating objectives attention to the rights of workers of our potential trading partners. We have also neglected to include currency coordination, which is an important aspect of ensuring that a free-trade system operates appropriately and correctly. We have also narrowed significantly the scope of concerns which we can address with respect to the environment. Regardless of our budget situation, we will have contributed to the further deterioration, if this bill passes, of our trade position, because we have included increased incentives to deploy capital from the United States from other parts of the world to developing countries, which effectively will mean that they will be our competitors. I know, when the Senator from Maryland and the Senator from New York were talking, they were talking about the overall trade balance, making the distinction between our trade balance and our Federal deficit. But I think if you just aggregate that trade balance, you will see clearly that in terms of manufactured goods we are consistently losing. And that is the most prescient, tangible point with respect to the arguments that, because of some of these trading rules, literally our good manufacturing jobs are going overseas.

Mr. REED. I thank the Senator for yielding.

Mr. REED. Let me just, in the remaining 3 minutes, say that individuals, colleagues who come to the floor and just talk slogans about free trade have not, I think, understood what is going on. Why does Japan run a $47 billion a year surplus with the United States? Because they exclude our goods. Why does China run a multibillion- dollar surplus with the United States? Because they exclude our goods; and because they manipulate their currency to reduce the wages, effectively, of their workers; because they are insensitive to environmental quality; because they claim, for cultural reasons, historical reasons, they don't have to abide by intellectual property rules or anything else. Those are the real issues that we face concerning our ability to compete in the world economy. What does this legislation do about those things? Ignores workers' rights; ignores environmental quality; and to a great degree it ignores currency coordination as major negotiating objectives. In effect what we said is: Listen, we are going to give the President fast-track power to do everything except what is most important to be done. And that is our objection. No one is here on the floor saying that we can withdraw from the world trade economy or we should withdraw from the world trade economy. What we are saying is let's negotiate agreements that will benefit all the citizens of this country; that will benefit working men and women throughout this country; that will ensure that they have a fair opportunity to work and earn wages that are decent. And that is not going to happen under this agreement. What we have to do, I believe--and I hope we can--is ensure that the negotiating objectives are changed; that we do provide the President with the directions, with the incentives, with the authority to go out there and talk seriously about all these issues. Frankly, there was some discussion before that our trading partners won't take us seriously. What they won't take seriously is any President of the United States talking about workers' rights, about environmental quality, and about a strong stable currency coordination in the world, if we pass this fast-track agreement. Because we basically told them we are not interested. What we are interested in here is promoting capital deployment from the United States into areas of the world that don't treat workers properly, that don't care about the environment, and may or may not manipulate their currency to maintain the advantage they have against the United States. This is not an agreement that we should support. If we want fast track, let's get it right, let's do it right. This is not the right way to go.

Mr. REED. I request an additional 3 minutes.

Mr. REED. Again, the Senator is absolutely correct. Frankly, to move to an analogy which is a little more colloquial but perhaps just as compelling, if we were managing a professional baseball team and we lost every year for 10 or 15 years, I don't think we would be managing that baseball team. That is essentially, if you charge us as managers of our international trade policy, we have lost every year for the last several decades. The trade policy has to be changed. Frankly, I don't believe anyone here is advocating that we could not use a good fast- track procedure. The argument is this is not a good fast-track procedure; that we are neglecting several of the most critical items when it comes to realistic competition between countries in the world today for international trade. We are totally neglecting the differential between our wage structure, particularly our manufacturing wage structure, and the wage structures overseas. We are neglecting it by simply saying that is not important to us, we don't care if workers in Third World countries are making 2 or 3 cents an hour or 20 cents an hour, when our workers are making $6 or $7 an hour or more. We don't care about that. We should care about that because, frankly, that is one of the reasons why we have a huge trade deficit, particularly in manufactured goods. Because there are incentives now, huge incentives, to deploy capital from the United States into these countries so that they can set up manufacturing plants. And we have seen it consistently. We have seen it even deliberately, blatantly, in the sense of finding places where the labor laws are so lax that there are incentives for companies to move in. In Malaysia it was an explicit condition of the movement of many American manufacturers into that country that Malaysia would not have, or enforce, strong labor laws. They would not give their workers the right to benefit from these new industries coming in and developing and selling successfully in the world economy. Is that wrong? It's wrong for those workers, which is a concern. But what is more of a concern for me, it is wrong for our workers because how can we expect to be competing against workers with new, modern technology based on new capital investments, workers who are as well skilled as ours may be, in a world in which they are paid a fraction of what is the minimum wage here in the United States? Then you can also look at the issue of environmental quality, which is so important. It is not important in just a touchy-feely sense; we want to make sure there are forests and the streams are filled with fish, et cetera. It is really a very practical sense. When a group of multinational countries now can go into Mexico, set up new manufacturing plants and literally take all their effluent and just pour it into the local sewer--something they could never do in their home country, not in the United States, not in Europe--that is an advantage for them to go there. We have to recognize that. We can't be naive and sloganize here on the floor and say it's just free trade, and free trade. Free trade makes sense if there are the conditions for free trade: That there are, in fact, complementary monetary and fiscal policies in each country; that there is, in fact, respect for workers' rights and workers' ability to organize. One of the assumptions underlying free trade is that when workers are displaced by imports in one sector of the economy, they move to a more efficient job in another sector of the economy. And we know that is not the case. It doesn't happen. Maybe it will happen in 50 or 100 years. But in the lives of Americans today, and their children's lives, that doesn't happen. We see dislocation. And we see dislocation that can be avoided, at least minimized, if we adopt strategies in this fast-track legislation that will direct the President to deal with these issues, to deal with them aggressively and to come back to us with an agreement that does talk about how we are going to raise the standard of living, through trade, of individuals in our trading partners' countries; of how we are going to deal with environmental issues in those countries; how are we going to make sure that currency valuations changes, manipulations, don't undercut all that we think we have gained at the bargaining table. The classic example of course is Mexico. We went in and reduced significantly, we thought, the tariffs that the Mexicans would charge us, the tariffs that we would charge them, thinking that now our goods would move back and forth freely. All of that was wiped out by a 40-percent reduction in the value of the peso; the purchasing power of Mexican citizens who might want our goods. And to not be concerned about that, to not elevate that issue of currency coordination to a major negotiating objective is absurd. It is particularly absurd within the last 2 weeks when all we have read about is the currency attacks in the Far East and Thailand, in all of these countries, leading to a shock wave on Wall Street.

Mr. REED. The Senator is quite correct--reclaiming my time. It illustrates his point, that there may be, in fact, countervailing foreign investments in this country to make up for our budget deficits, but that does not explain the phenomenon of losing consistently and persistently the battle for the sale of manufactured goods from our suppliers to other countries around the world.