The two following articles should give you a better understanding of the FTAC 301 petition; who is for it and whose against --and why. As always, you humble servant has added his observations.
SAG Divided Over Canada Approach
Members disagree on whether challenging Canada will stem outsourcing.
September 20, 2007
By Lauren Horwitch
Nine years of hard work and careful politicking came to fruition for the Film and Television Action Committee on Sept. 4, when the grass-roots nonprofit organization filed its 301(a) petition with the Office of the United States Trade Representative. In a 114-page petition, accompanied by 3,447 pages of supporting documents, FTAC made its case that Canada's tax breaks and other subsidies unfairly lure American film and TV productions north, costing U.S. workers thousands of jobs annually.
Gretchen Koerner, chairwoman of the Screen Actors Guild's National Legislative Committee, along with reps from a handful of local L.A. trade unions, stood with FTAC leaders during a Sept. 5 press conference at SAG's Hollywood headquarters announcing the start of what Teamsters Local 399 business agent Steve Dayan said needs to be "an intense lobbying effort."
Koerner told reporters SAG has signed the FTAC petition because actors are among the thousands whose jobs are "senselessly outsourced in an industry that is thriving and currently setting box office records for summer releases... . That not only greatly diminishes my ability to make a living as an actor, but it affects the health and well-being of my family and my community."
She continued, "A very few of our members who are recognizable names and celebrities travel with productions to Canada to work -- one, two, three, perhaps four actors on a production -- but the vast majority of our members do not go. Supporting players, co-stars, guest stars, day players, stand-ins, background actors, stunt performers, singers, dancers -- we stay at home and watch American producers take American films across the border and employ Canadian performers."
However, some SAG members are not fully on board with their union leaders' decision to back FTAC's effort. Critics raise questions about who is genuinely affected by runaway production to Canada and whether FTAC's petition is the best way to keep production stateside.
A Lack of Unanimity
Some SAG members support the petition but doubt it will make much difference. "FTAC [is] a long shot in my estimation, but there's little else we can do," Brad Blaisdell, a member of several SAG committees, wrote to Back Stage via email. "I think threatening Canada will only keep them more resolute, and we have a pretty good idea how our government will react."
Since when is it a threat to make sure one’s legal rights are not being violated, and that’s exactly what FTAC is trying to accomplish—make sure Canada plays by the rules.
One actors' union in Canada made its views known right away. Stephen Waddell, executive director of the Alliance of Canadian Cinema, Television and Radio Artists, said in a Sept. 4 statement, "This complaint is without merit or substance and won't succeed under any trade agreement."
Rather than blame Canada, Blaisdell and others believe, FTAC should back additional domestic production tax-incentive programs, already enacted in more than 30 states. "The only thing that seems to work are the tax incentives," Blaisdell said. "I believe that is where our focus should be for Hollywood right now. If California leaders are not willing to help the movie industry survive, then we will continue to see the work spread all over the world and away from Hollywood."
Hmmm, we shouldn’t blame Canada for any trade violations that take money out of SAG members pockets? Ah, that may play well with ACTRA, but I don’t think it will go over with many of our Hollywood members. Now, of course, Mr. Blaisdell is entitled to his opinion about state tax incentives stemming runaway production, but according to the CEIDR report, an in depth report on Runaway Production, there is no evidence that state tax-incentive are having any effect on Runaway Productions. “U.S. state incentives are working, but it is not clear if they are keeping productions from leaving the U.S., or just moving them from one U.S. location to another, especially if a location doesn’t offer any incentives.”(CEIR Report)
The American Federation of Television and Radio Artists, which did not sign FTAC's petition, seems to agree. "I don't think there's a uniform approach to addressing the problem of runaway production," said Thomas Carpenter, AFTRA's general counsel and national director of legislative affairs. "The members on our Legislative Committee really have chosen to focus on the issue of creating opportunities in the U.S. rather than creating penalties and barriers."
The only opportunities AFTRA is creating are opportunities for AFTRA--by giving away actors residuals to gain contracts in order to bolster AFTRA’s poor financial status.
Tom Ligon, a member of SAG's New York board and the guild's National Legislative Committee, said domestic incentives are the best solution. What's more, FTAC's petition doesn't have much of a chance without the support of AFTRA and other above-the-line organizations such as the Writers Guild of America, the Directors Guild of America, and the Motion Picture Association of America, Hollywood's main lobbying arm in Washington. None of those groups signed the petition. Carpenter called the petition impractical, noting that not only is the industry ambivalent about the 301(a) but the guild is not unanimous in its support either.
Tom is certainly right about one thing, he and his NY Cohorts are against FTAC’s petition because if it passes and Canada can no longer engage in unfair practices, that will lift the smokescreen that his USAN party has used as an excuse to gain NY state tax incentives to LURE Hollywood jobs to New York. If Runaway Production is stopped by this petition, New York will have to come up with a new reason to use SAG funds to entice jobs from Hollywood’s Membership to their own. As to why the MPAA doesn’t support anything that would stop the US and Canada bidding for their productions. Well, Duh? And of course directors and writers arem't hurt financially by jobs going to Canada. IATSE makes money off their Canadian membership and they seem willing to piss off their US membership in order to appease their Canadian members. As for AFTRA, since movies aren’t under their jurisdiction, they don’t really care, and besides they’re to busy now screwing actors to get involved.
Ligon said he was the only New York delegate in the room when the national board voted to support FTAC at the October 2005 plenary meeting. The other New Yorkers, who left the meeting in protest over the firing of then-CEO Greg Hessinger, missed the vote, which was preceded by a presentation by FTAC leaders and Pamm Fair, SAG's deputy national executive director for policy and strategic planning. "The so-called unanimous vote there didn't involve half of the guild," said Ligon, who added that he was too inexperienced at the time to know he had the option to object.
Hmmmm, they walked out of the meeting which members paid thousands of their dues money for them to attend, then they claim the vote wasn’t unanimous. Your wasted dues money in action folks! 
Fair responded, "The vote was unanimous because that's who was in the room…I can't decide that something has not enough support because not enough people were in the room. We go forward…It was on the agenda, and we got to the part of the agenda where it came up, and that's just the way it was."
However, Fair noted that the SAG vote to give $50,000 to FTAC's Washington, D.C.-based representation, trade law firm Stewart and Stewart, in October 2006 wasn't unanimous. The vote passed with 80 percent support.
Extras Support
Ligon said Membership First, the party whose membership includes SAG president Alan Rosenberg and Koerner, has exaggerated runaway production's impact and has strong-armed the board to support FTAC as a means of appeasing background actors, who, according to Ligon, are the hardest hit by productions moving to Canada. New York delegates have often clashed with L.A.-based Membership First members over issues, but this case is not a matter of East versus West. "There is no New York versus Hollywood or Membership First in this instance. It's Membership First versus the rest of the country. Most emphatically so," Ligon said.
Hmmm, let’s see, on one hand Mr. Ligon and his USAN party ballyhoo their state incentives because they stem the tide of runaway production, but on the other hand he claims Membership First has exaggerated runaway productions impact, while he and his gang ignore all the various reports that attest to 
billions of dollars being siphoned out of our economy because of it.
"I don't know that that's true," Fair responded. "There's support for this from a lot of corners in the union, and there are people who will tell you they support it, but they're not sure it will work. I don't think any of us can be sure that it will work. It's just another tool in our toolbox." She added that SAG will continue its efforts to support domestic tax incentives.
Fair said the union knows for a fact that fewer members across the board are traveling to Canada with U.S. productions: "We know that the companies will take fewer folks at the top of the call sheet over the border with them, and there are infrastructures, especially in Canada, where they can hire actors to fill those roles. It's not about background actors only, although clearly they feel this pinch. It's about the middle-class actors like Gretchen&hellip. She gets left behind."
As to background actors, they are hurt about as much by state tax incentives as they are by those jobs that go out of country, since most the jobs lured from Hollywood to other states do no cover background actors.
More Movies, Fewer Incentives
Tim McHugh, executive director of FTAC, said the effects of runaway production are indeed damaging and real. He cited a study released in 2006 by the Center for Entertainment Industry Data and Research that found Americans lost 47,000 jobs per year and approximately $23 billion in economic benefits from 1998 to 2005 due to feature films moving out of the states.
So, tell us again, Tom Ligon, how Membership First is exaggerating the impact of runaway production?
A visual effects supervisor who worked most recently on Into the West and DOA: Dead or Alive, McHugh has seen industry jobs fizzle firsthand. "In the '90s we were all working so much, we couldn't read the scripts fast enough. It was a great time. Then the work trickled to Canada, and somewhere around '98 the floodgates opened up. The phone just stopped ringing," he said, adding that FTAC's position on creating more domestic tax incentives, especially in California, is, "We'll try to encourage anything that keeps jobs here."
Trying to keep jobs in California has been particularly harrowing; several attempts to pass a tax-incentive bill have been unsuccessful. Most recently, a provision that would have provided $70 million in nonrefundable film-production tax credits and $5 million for commercials shooting in the state was dropped from the state's latest budget.
However, McHugh's personal outlook differs. "I feel, ultimately, subsidies are a terrible idea. They've only driven down wages and working conditions, and they've pitted countries, states, provinces, and cities against each other," he said. "Everyone likes to think they're creating jobs. But the only way you create a job is to make more movies&hellip. What subsidies do is take [the] same group of films and just disburse them around the globe to different locations&hellip. It's not like suddenly there's 20 percent more movies getting made. That would be great."
McHugh acknowledged the petition is unique in that it does not have the support of the entire industry. "Generally when an industry goes to the federal government for this kind of help, it's the owners of the industry and the workers together&hellip. This is unique because the owners of the corporations that finance the film industry, they're saying there's no problem here&hellipbut the workers, who have lost their houses and their pensions and their health care and their marriages and in some cases their lives, have a different opinion."
He added that MPAA and DGA members are more aligned with the producers and studios that benefit from filming in Canada: "The power in [Hollywood] likes things to run the way they're being run right now, because they're getting a cut of it. It's the rest of us, the workers, who are all being chopped off."
Representatives of the MPAA, DGA, and WGA declined to comment.
McHugh could not predict whether the absence of those groups or infighting among SAG members will hurt the petition's chances of convincing the USTR to investigate Canada's incentives. "We'll find out what our odds are in the next 45 days."
USTR will rule on whether to investigate Canadian subsidies by Oct. 18.
Lauren Horwitch can be reached at lhorwitch (at) backstage.com.
Fugitive Production
Claire Wright, published in the Los Angeles Daily Journal, September 12, 2007, page 6
On Sept. 4, the Film and Television Action Committee filed a petition with the Office of the U.S. Trade Representative requesting that it investigate the enormous film subsidies that
Canada is providing to U.S. film producers to shoot films and television shows in Canada. The petition furthermore requests that, if the USTR finds that those subsidies contravene World Trade Organization laws, the United States file a dispute settlement case against Canada in the WTO. It is impossible to overstate the importance of this petition for U.S. film workers, the U.S. film industry and all Americans.
Few Americans realize that more than half of all U.S. feature films are now filmed outside of the country, primarily in Canada. These include many well-known films of quintessential American stories, such as “Independence Day,” “Cinderella Man,” “Brokeback Mountain” and “Chicago.” In fact, so many films and television shows are being shot by U.S. producers in Canada that the country is often referred to as Hollywood North. American studio executives and actors travel to Canada and are quickly granted temporary work visas, but rank-and-file American film workers are refused entry into Canada and their positions are quickly filled by Canadian film workers. The Canadian subsidies available to U.S. producers are actually based on the number of film jobs that the producers can fill with Canadians.
This case will test the international trade system itself, as it is really a fight between U.S. film producers, who are being enriched by the Canadian subsidies, and the below-the-line film workers — such as cinematographers, special-effects experts and set designers — who are all losing their jobs as a result of the subsidies. The WTO appellate body has ruled in a case involving General Motors cars manufactured in Mexico that the WTO laws are intended to protect “domestic industries” and “domestic products,” rather than “domestic companies” or “domestic profits.” Therefore, the fact that U.S. film producers are actually benefiting from Canada’s film subsidies is irrelevant.
Furthermore, this important question is being raised in the context of what is arguably the most important industry in the United States — the entertainment industry. Americans are internationally known for their entertainment industry, and, until recently, this industry created hundreds of thousands of jobs for U.S. nationals each year, contributed approximately $52 billion to the national economy annually and consistently ranked second among industries in which the United States had a trade surplus. However, in its 2006 report, the Center for Entertainment Industry Data and Research revealed that the economic losses attributable to this runaway film phenomenon now total $23 billion and 47,000 U.S. jobs annually, with Canada being the primary beneficiary of these losses.
To be fair here, let’s not forget that SAG USAN national board alternate, Tom Ligon stated in the Backstage article that Membership First has exaggerated runaway production's impact.
Not surprisingly, the U.S. film producers who receive the enormous subsidies from Canada oppose FTAC’s petition, as do some American entertainment union leaders. As it turns out, the unions earn more money by signing up new members in Canada than they do by collecting ongoing dues from longtime American members.
If the United States ultimately files a case against Canada on this issue in the WTO, it should prevail. The trade laws are based on liberal economic theory, which holds that governments should not intervene in the marketplace but should instead allow the natural rules of supply and demand to dictate which industries will flourish in which countries. While many Americans are opposed to the outsourcing of U.S. jobs for any reason, liberal theory provides the basis for why the trade rules allow companies to move their manufacturing operations to countries where the wage rates are naturally lower or where the currency exchange rates are naturally more favorable.
By contrast, there is nothing natural about Canada writing huge checks to U.S. film producers and thereby artificially lowering the costs of film production in Canada. There should be no mistake about what is really happening: Canada is bribing U.S. film producers to move U.S. film jobs to Canada, and those U.S. film producers, with their eyes on their profit margins, are readily accepting these bribes.
There also can be no question that Canada’s film subsidies are trade-distorting, in that they cause fewer American-made films and more Canadian-made films to be sold in various markets around the world. Therefore, a WTO panel should conclude that the WTO Agreement on Subsidies and Countervailing Measures (the SCM Agreement) requires Canada to abolish its foreign film subsidy program or amend it so it no longer causes harm to the U.S. film industry.
In this regard, it is important to understand that the film subsidies provided by the U.S. government and by various U.S. states and cities are not trade-distorting. They do not harm the film industry in Canada or any other country. They merely move U.S. film production from one U.S. location to another.
The opponents of FTAC’s petition often argue that the U.S. should permit its film producers to film some projects outside of the country because the money they save by doing so will enable them to shoot more films in the United States. This “trickleback theory” is patently absurd and demonstrably false. No budget analyst for a U.S. film production company is going to risk her job by arguing to her bosses that they should forego the additional profits that could be gained by filming their next film outside the U.S. because they have already made enough money by shooting other films outside the country.
The statistics tell a very clear story. All that has happened since U.S. film producers first started accepting foreign film subsidies is that more and more filming has occurred outside of the United States.
Opponents often claim that if the USTR pursues a trade action against Canada on the film subsidy issue, it will initiate a trade war between the United States and Canada. At best, this claim is silly; at worst, it is irresponsible fear-mongering. Neither Canada nor the United States has been the least bit timid about suing the other in the WTO, and both have done so on many occasions. Trade between the two nations has always survived these disputes.
Canada’s argument that it is actually providing film subsidies to a service industry, the Canadian film workers, rather than to U.S. producers of a good, should be dismissed out of hand. Canada’s very similar argument in a WTO case involving its restrictions on U.S. periodicals was soundly rejected by the WTO appellate body. A WTO panel or the appellate body would conclude the same in this case.
Finally, all Americans should be gravely concerned about the fact that American film companies have been regularly replacing U.S. workers with Canadian (and other foreign) film workers. Cultural anthropologists around the world agree that members of any national culture must continually articulate what is important and distinctive about their national culture or soon see it perish. Former French President Francois Mitterand, during the Uruguay round of multilateral trade negotiations, phrased it this way: “A society which abandons the means of depicting itself would soon be an enslaved society.”
One of the stranger aspects of this story is that there are legions of Canadian and other foreign nationals attending American accent classes in order to increase their chances of being hired by a U.S. film company to impersonate an American in a U.S. story filmed outside of the country. Before it is too late, real Americans need to start using their real American voices to vigorously support FTAC’s petition challenging Canada’s film subsidies. Surely, all Americans agree that their cultural heritage is too important to allow it to be sold to the highest foreign bidder.
Claire Wright is a professor at Thomas Jefferson
School of Law in San Diego and the author
of “Hollywood’s Disappearing Act: International
Trade Remedies to Bring Hollywood Home,”
published in the Akron Law Review in 2006
and reprinted in the Entertainment, Publishing
and the Arts Handbook 2007
A.L. Miller SW Editor & Chief
PS, thanks to SAG member, Robert Amico for all his hard work with FTAC 301 petition 
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