By Jack Egan
The Film & Television Action Committee finallyfiled its long-discussed and controversial trade case with the federalgovernment in early September. It claims that Canada has unfairlysubsidized its entertainment industry, causing tens of thousands ofbelow-the-line job losses in the United States.
FTAC’s allegationsof harm are contained in a 3,447-page document that went to the officeof the U.S. Trade Representative in Washington, D.C., asking for aninvestigation into the legality of the subsidies, which run at about 18percent. They can be even higher, depending on the Canadian province.The petition alleges that Canadian subsidies have resulted in the lossof 46,200 below-the-line jobs and a $9.35 billion hit to the U.S.economy.
FTAC has been pushing the case since 2001, but onlyrecently was able to raise the money to go ahead with the filing. Ithas retained a Washington law firm, Stewart and Stewart, thatspecializes in trade cases.
Financial support came from Local 44,the property craftpersons union, to the tune of $150,000, the largestcontribution and the only one from an IATSE local. The Teamsters gave$100,000 and $50,000 came from the Screen Actors Guild, with another$100,000 from a number of backers.
FTAC president Tim McHugh andother members of the group’s executive board, Gene Warren and EarlBrendlinger, expressed optimism that they would succeed in theirpetition. But first it needs to go forward. The trade representativehas to agree that the claims are legitimate before the petitionsadvances and he could turn it down.
Strong opposition to a tradecase against Canada has been expressed by, among others, the DirectorsGuild and IA president Tom Short. The IA has Canadian guilds among itsmember unions. There’s also concern that a trade case might backfire,bringing retaliation from Canada, claiming American television showsand movies are flooding the Canadian market.
Meanwhile, many statesin this country like Louisiana, New York and Connecticut have ladledout enormous subsidies, arguable to the detriment of Los Angeles andalso Canada. Though the petition is about the loss of jobs in theentertainment sector throughout the U.S., many backers of the case seeits goal as stemming job losses primarily in Southern California. Also,many shoots have lately gone to locations like Eastern Europe where thedraw is the low costs, not subsidies.
Almost no trade petitionsusing section 301(a) of the North American Free Trade Agreement havegone forward in recent years. Most are labeled as protectionist and diea quick death. To overcome such objections, strong political backingneeds to be cultivated, which means hiring expensive lobbyists.
Inaddition, almost no members of Congress have spoken out in favor of thestrategy, with the exception of presidential candidate Dennis Kucinich,who is a member of the House of Representatives and also Local 600.
Thetiming is also a bit awkward. A big factor drawing shoots to Canada wasan extremely favorable Canadian exchange rate against the U.S. dollar —the low was 65 cents a few years ago. That’s no longer the case.Recently the Canadian currency has been hovering at around 95 cents,after a rapid appreciation earlier this year, which has all but wipedthe benefits of the subsidies, and there are predictions it could begoing to a 1-to-1 parity. A number of productions that were headed toCanada have been pulled back because of the unfavorable currency move.
Written by Jack Egan