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FTAC Filing of Trade Dispute


Long talked about, the international trade case charging Canada with unlawfully subsidizing film and television production appears close to being officially submitted to the Office of the US Trade Representative by the Film and Television and Action Committee.”The ball is beginning to roll, and I’d say we’ll be filing something within two months,” Gene Warren Jr. an FTAC executive director, told Below the Line.He and two other members of FTAC’s leadership group had just returned from a week of discussion in Washington DC at the end of February dealing with the filing of a so-called 301 (a) petition. The group consulted with their Washington attorney and held meetings with staff at the USTR, the departments of Treasury, Commerce and State and with members of Congress, said Warren.”The meetings were good. We have a very strong case,” said Warren, who besides his FTAC role is a lauded visual effects supervisor who won an Oscar for Terminator II. “It’s all about politics now.”FTAC, founded in 1998, has been at the vanguard of the sometimes controversial fight against runaway production, or the flight of shoots to locations abroad because they are supposedly cheaper.The group says the trend has accelerated and cost many workers in the US entertainment industry their livelihood. Four years ago, the group first considered using trade legislation as a weapon in the fight against what it considered unfair tax breaks handed out by Canada and a growing number of other countries that seemed to stack the deck against deciding to shoot in the US.”We are keeping our options open,” said Warren, as to whether other countries besides Canada will be named in the trade filing seeking damages. “Our focus is mainly on Canada for now because they are head and shoulders above everyone else in terms of the harm from their subsidies.”Even if the filing of what’s known as a 301 (a) petition may finally be near, it’s only the first step—a request for an investigation by the USTR. The trade office then has several months to determine, based on evidence presented, whether there’s sufficient merit to the claims of unfair play in order to proceed. During the nearly seven years of the Bush Administration, only one 301 (a) case has advanced to that next stage.The filing itself is likely to stir considerable controversy throughout the entertainment industry as well as in Washington, and could well reverberate abroad. Both the Motion Picture Association of America, the lobbying group for the studios, and IATSE are against it, along with other important unions such as the Directors Guild of America.The studios, which operate all over the world, fear the filing of a trade case could trigger retaliation that would hurt them. IA president Tom Short has vociferously expressed his opposition, in large part because there are Canadian locals in IATSE.That hasn’t stopped several IA Hollywood unions from not only backing the effort, but helping finance it. “Local 44, [Affiliated Property Craftperson’s union] is a strong supporter,” said Warren, noting the union has contributed the largest single amount, $150,000. And Local 728 the Studio Electrical Lighting-Technicians union, is also a financial backer. Non-IA unions such as the Teamsters and the Screen Actor’s Guild have also put money behind the effort, he says.”I’m glad to say we’ve raised more than enough to proceed and we’re looking forward to going ahead with a filing soon,” said FTAC lawyer Alan Dunn, a partner in Stewart and Stewart, a Washington law firm specializing in international trade actions, who in the past said at least $500,000 was needed. He declined to elaborate on the exact timing. “We’re at a delicate point in this, so I don’t want to get out in front of the government authorities with whom we are conferring on the subject.” The election of a Democratic Congress last fall is thought to have somewhat improved the political atmosphere for going forward; so has the public’s growing anxiety about jobs lost by Americans to foreign workers, which is turning legislators from both parties against the global free trade paradigm.”The fact of the matter is trade as a subject is very much at the forefront of the political debate in Washington and nationally, and that’s not a bad thing,” said Dunn. “So it’s not a bad time to proceed.”Dunn, “because it’s sensitive,” declined to disclose the names of any Congressional backers for a 301 (a) filing, with the exception of Dennis Kucinich, (D-Ohio). The House of Representatives member, who is a candidate for the Democratic Party’s presidential nomination next year, has been a longtime FTAC supporter. Having once worked at a television station, he also happens to be a member of Local 600, the International Cinematographers Guild.However, the ICG executive board, at a special meeting last November, narrowly voted to reject a proposal to financially back FTAC’s trade-case campaign. Countering the presentation of Dunn, who spoke on behalf of a 301 (a) filing at the board session, was Michael Punke, a former official in the USTR’s office during the Clinton Administration. He said the odds of FTAC’s trade petition going forward after an investigation was only about 5 percent. Punke added that an attack on Canadian subsidies might possibly trigger a counterattack on incentives to attract film and television productions offered by numerous states in this country like Louisiana and New York.Once FTAC’s trade complaint actually gets filed, the case can theoretically move forward swiftly. The USTR has a few months to conduct an investigation, and then can decide whether to let it proceed. If there’s a go-ahead, the case immediately goes to the next stage: negotiations under World Trade Organization dispute settlement rules. “The WTO provides for an expedited procedure,” notes Dunn. “They move quite quickly relative to normal proceedings in a US court.”But as in Hollywood, getting that greenlight—from the USTR—may be the toughest hurdle, before it’s full speed ahead.

Written by Jack Egan

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