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HomeNewsFeds Reject Canadian Incentives Investigation

Feds Reject Canadian Incentives Investigation


By Jack Egan
The federal trade office has rebuffed a high-profile runaway production complaint filed by the Film and Television Action Committee and several Hollywood unions. The filing alleged that Canada has illegally subsidized its film and television industry, causing tens of thousands of below-the-line jobs in the United States to be lost in recent years.
Susan Schwab, the United States trade representative, issued a statement that she would not initiate a Section 301 investigation:
“Based on a thorough review of the economic data, other facts, and legal arguments set out in the petition, the interagency committee unanimously recommended that the USTR not accept the petition because a dispute based on the information and arguments set out in the petition would not be effective in addressing the Canadian subsidies. Ambassador Schwab has accepted this recommendation and has decided not to initiate a Section 301 investigation in response to the petition.”
“We’ll tread water for a while and then refile,” said Gene Warren Jr., one of the three members of FTAC’s board who claimed Schwab had misread the petition. “In just over a year we’ll probably have a new USTR,” he said, indicating he thought the ruling was political and might change if a Democrat is elected president next year. He also said some states had opposed the petition, fearing that their own substantial filming subsidies might come under challenge, but he didn’t know which ones.
The FTAC group predicted success when the filing was made in early September. Such an action had been under discussion for more than six years, but it was not until recently that enough money was raised to proceed. The group retained Stewart and Stewart, a Washington law firm specializing in trade cases, to make the filing.
Local 44, the craftspersons union, put up $150,000, the largest amount and was the only local in the International Association of Theatrical and Stage Employee union to provide financial backing. The Teamsters contributed $100,000 and another $50,000 came mainly from the Screen Actors Guild, a strong proponent of the trade filing. SAG said it was “extremely disappointed” by the finding. “We believe it is imperative to seek every remedy possible to fight runaway production while protecting and improving the wages and working conditions of our members.” The cities of West Hollywood, Burbank, and Glendale, where many entertainment companies are located, were also backers.
Canada, not surprisingly, expressed strong opposition to the charges in the FTAC filing. IA President Tom Short was against it, in part because several Canadian guilds are in the IA. The executive board of the International Cinematographers Guild, in a narrow vote, decided not to contribute. The Directors Guild also withheld support. There was concern among the opponents that going ahead with the filing could trigger retaliation and set off a larger trade dispute.

Written by Jack Egan

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