Group Presses for TV, Film Tariffs Against Canada

Renewed efforts by some of Hollywood’s rank and file to spur a federal investigation of alleged unfair trade practices by Canada have reheated a divisive battle over the best way to stem the loss of film production to cheaper countries.

Officials from the Film & Television Action Coalition--backed by the Screen Actors Guild and other local unions--plan to file a petition Tuesday with the Commerce Department charging that Canada’s government film subsidies are illegal and warrant countervailing tariffs on Canadian productions.

“If 1,000 people get laid of from IBM it’s national news,” said FTAC chairman Brent Swift. “When we lose 30,000 jobs a year, no one hears about it. The film industry is being stolen by Canadians.”

Members of a coalition of groups that has been working for more than three years to establish U.S. subsidies that would compete with Canada’s are infuriated by the step, calling it “disastrous.” In August, when the petition was unveiled, the coalition unsuccessfully appealed to FTAC and SAG--which have worked with them on legislation--to change their stance.

So-called runaway productions cost the U.S. an estimated $10 billion in annual revenue, according to a government report issued this year, and it has long been a top concern for working actors and behind-the-scenes employees who depend on steady employment to make ends meet.

How to keep the studios at home, however, has been a subject of debate, and recent events may have pushed a resolution further into the future.

One approach is to mimic the Canadian subsidies with a wage-based incentive--the tack taken in bipartisan bills now under consideration in Congress.

The other--the demand for countervailing tariffs--would effectively strip the benefits of the Canadian subsidies by imposing fines on U.S. productions that take advantage of the discounts.

Once a petition is filed, trade officials have 20 days to decide whether an investigation is warranted. If the petition is taken up, it would open studios to an in-depth investigation of what role--if any--the subsidies played in their decisions. The effort is being fiercely opposed by the Motion Picture Assn. of America, which has lent its support to the legislation.

The sponsors of bipartisan proposals now being considered by Congress that would provide wage-based incentives for U.S. productions said Wednesday that any investigation into the petition’s charges probably would derail their legislation.

“There’s no guarantee of passage of my legislation, but there is a sure way to kill it, and that is to start a trade war,” said Rep. David Dreier (R-San Dimas). “Our goal is to open new markets for entertainment industry products, not to close our markets.”

Congressional aides said support for the bill, already a tough sell in a town more accustomed to bashing Hollywood than lending a hand, would evaporate quickly if industry groups were seen as promoting roadblocks to free trade.

With American films still dominating the world market--a source of dismay in many countries that fear their cultures are being overtaken--some opposed to the effort say it sends the wrong message.

“The general notion of not letting this go on any longer is right,” said Rep. Howard Berman (D-Los Angeles), a co-sponsor of the House bill with Dreier. “The question is, when you start imposing these countervailing tariffs, that decision will be used against you ... by other countries either for putting [up] trade barriers or keeping the ones they already have.”

But some backers of the trade petition say the incentives proposed by Congress are just as illegal as the Canadian subsidies they are trying to counter.

“They’re going down the wrong path,” said Joel Joseph, who drafted the petition and serves as counsel for the Made in the USA Foundation, a coalition of domestic manufacturers and unions. “Their opposition is annoying because they’re trying to counteract the same problem we are, but their solution is just as wrong as the problem.”

Joseph said a case can be made that films, like computer software, should be considered a product rather than a service. That definition, he said, would ease federal regulators’ efforts to track the subsidies’ financial impact.

A rally in support of the petition is planned for 1 p.m. Sunday at the Hollywood Bowl. SAG spokeswoman Ilyanne Kichaven said Elliot Gould will be among the union officials in attendance.

Some SAG members are divided over the counter-tariff proposal. Newly elected SAG President Melissa Gilbert campaigned against it and criticized her opponent, actress Valerie Harper, for supporting it.