HOLLYWOOD — Leaders of the AFL-CIO have maintained neutrality on the hot-button question of countervailing tariffs in the wake of a deep split among Hollywood’s unions over the issue.
“We are not taking any position at this point,” said AFL-CIO spokeswoman Lane Windham, adding that leaders of the umbrella labor org tend to avoid intervening in policy disputes among unions.
The hands-off stance comes as parties scramble to influence a federal government ruling on a petition seeking a federal investigation into the legality of Canadian film and TV subsidies. Probe could lead new rules under which producers who accept Canuck subsidies would be required to pay a tariff equal to the subsidy in order to get the film cleared for U.S. distribution.
Proponents — who include 12,000 individual petition signers, SAG’s national board, five Teamster locals and the Film & Television Action Committee — have claimed the investigation is the most effective means to put the brakes on runaway production to Canada. But opponents including the Directors Guild of America, IATSE and AFTRA have claimed the tactic is counterproductive and could kill chances for federal tax-credit legislation to aid filmmakers on projects with budgets under $10 million.
With a decision due Jan. 14 from the Dept. of Commerce, the rhetoric has remained heated. Proponents claim Canadian subsidies have taken away 25,000 jobs and $30 billion in economic activity from the U.S. in the last three years; Motion Picture Assn. chief Jack Valenti has warned of a trade war if the investigation goes forward; and in the latest salvo, IA prexy Thomas Short has claimed the imposition of tariffs would put more than 500,000 jobs at risk.
“It is the position of this international that such countervailing tariffs would be extremely damaging to the motion picture and TV industries in the United States, which does in fact dominate the world as it applies to the production and exhibition of motion pictures,” Short said in a recent letter to AFL-CIO chief John Sweeney. “It is further the position of the IATSE that to engage in a trade war could literally jeopardize over one-half million jobs. Any support your office and the AFL-CIO may lend to rejecting such petition for countervailing tariffs will be greatly appreciated.”
But petition proponents claim the trade-war argument is bogus. “There will be no trade wars because trade wars are essentially illegal under international trade agreements, just as subsidies are, if any nation wishes to challenge them,” said IA member and dissident Michael Everett in an open letter released this week. “The U.S. and countless other countries have imposed countervailing duties to offset illegal subsidies, and no great trade war has resulted. Moreover, in the unlikely event there is a trade war, America, as the world’s premier importing nation, will handily win.”
Everett also criticized arguments from unions that the petition will hurt chances for federal legislation, which is supported by all Hollywood labor unions including SAG. “We can hardly blame the studios for fighting to retain taxpayer handouts from the Canadians, nor can we blame them for promoting a bill that would cut them in on U.S. tax money as well,” he said. “But we find serious fault with labor organizations that fall in behind studios in support of corporate welfare schemes.”
The AFL-CIO’s neutral position comes despite a unanimous vote by the AFL-CIO’s executive council last month to support a resolution endorsing tactics such as seeking tariffs.
“The United States must vigorously enforce all of its trade laws, including workers’ rights provisions, and amend such laws to ensure fair trade,” said the resolution, dubbed “An American Economy That Works for All Working Families.” The resolution calls for programs that support manufacturing and infrastructure investments, sound tax and spending policies and improving service-sector jobs instead of providing tax breaks for the wealthy and corporations.
“We must initiate trade cases to stop the market-distorting importing of goods subsidized by our trading partners or, worse yet, dumped in the United States below the cost of production to secure greater market share,” the resolution said.
FTAC prexy Brent Swift plans to meet in Washington, D.C., next week with Commerce officials to supply further details and clarification n the petition. He also is seeking to meet with Sweeney.
Questionnaires due Monday
The Intl. Trade Commission has launched a preliminary investigation into the subsidies by issuing more than 100 questionnaires to Hollywood studios and production companies with a Monday deadline. A spokeswoman said this week that several questionnaires, which seek extensive disclosure about profits and spending, have been completed but that the proprietary information would remain confidential.
If Commerce clears the petition on Jan. 14, the ITC will hold the first public hearing on the issue five days later in Washington.