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H'wood orgs seek action vs. subsidies
Groups press Commerce on runaway prod'n

from Daily Variety
Wed., Jun. 30, 2004

The Film & Television Action Committee, a group of below-the-line Hollywood workers, and the Intl. Cinematographers Guild have asked the Dept. of Commerce to take action against foreign governments' filmmaking subsidies.

Orgs have filed comments with Commerce's Unfair Trade Practices Task Force, a panel created last month to help the U.S. manufacturing sector regain some of the nearly 3 million jobs lost since 2000.

"Movies and TV shows have always been shot on locations all over the world and outside the major production centers for creative reasons, typically to take advantage of uniquely spectacular landscapes or unique architecture," the FTAC filing said. "However, the relocation of significant amounts of film and TV production to foreign countries for solely financial reasons and with no regard for artistic concerns is a recent phenomenon and is directly related to the creation of foreign subsidy programs."

The 20-page FTAC filing singled out Canadian and Australian programs and asserted that the subsidies violate provisions of trade agreements that they have committed to as members of the World Trade Organization.

"We are in imminent danger of suffering permanent, irreversible damage to our world-renowned film industry as its highly specialized work force, which took nearly a century to build, is dispersed and not renewed," FTAC exec directors Tim McHugh, Don Newman and Gene Warren Jr. wrote. "Foreign subsidies do not create new jobs; they merely relocate existing jobs from one country to another."

The filing asserted that nearly 38,000 of the 51,000 jobs in the Canadian film and TV industry in 2002-03 were the result of productions eligible for Canuck film tax credits. It also detailed the incentive programs offered by the provinces of British Columbia, Ontario and Quebec.

The FTAC filing also describes what it calls lavish Australian subsidies for offshore productions.

Filing does not offer specific dollar figures for runaway losses but notes that in a recent compilation of 52 features in pre-production, 28 were to be shot in the U.S., 20 in foreign countries and four at unknown sites.

The issue of how to deal effectively with runaway production has pitted 6-year-old FTAC against many parts of the showbiz establishment. Org has spent most of its energy on prepping a North American Free Trade Agreement Section 301(a) petition asking the U.S. trade representative to initiate negotiations with Canada to remove its subsidies, backed by the threat of intervention of the WTO, as the most effective way of putting the brakes on productions fleeing to less-expensive locations outside the U.S.

Orgs such as the Motion Picture Assn. of America, the American Film Marketing Assn., Directors Guild of America, Intl. Alliance of Theatrical Stage Employees and American Federation of Television & Radio Artists have long contended that such a strategy could backfire by leading to a trade war and further loss of jobs.

The three-page letter by the Intl. Cinematographers Guild, which operates as IATSE Local 600, represents a reversal of policy for the union. A slate headed by recently elected president Gary Dunham won several other offices and board seats after campaigning on a platform of taking a more aggressive stance on runaway production. The Guild said in its letter that runaway production is part of the exportation of American jobs and commended the Dept. of Commerce for launching an inquiry.

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