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Visual-Effects Artists Urge Tariffs to Fight Runaway Production

Sony’s announcement in June that it was moving its Imageworks headquarters to Vancouver delivered yet another blow to Los Angeles as it struggles to retain the nuts and bolts of production while other states and nations offer lavish sweeteners.

But to a group of visual-effects artists, it was just one more example of the need to ramp up the battle against such subsidies: Rather than try to match incentive-for-incentive, they maintain, why not pursue a different strategy: trade sanctions against some of the more egregious examples of such givebacks?

In the coming weeks, the artists are expected to launch a campaign to raise money for a legal effort which, if it succeeds, would force the U.S. government to impose a tariff on countries that lure away business by subsidizing labor costs.

“The business of subsidies is essentially a (shell) game, an unwinnable race to the bottom,” said vfx artist Scott Squires.

To take the fight to the government, in this case, U.S. trade authorities, Daniel Lay — author of the popular VFX Soldier blog —  and others have formed the Assn. of Digital Artists, Professionals and Technicians (Adapt). Their plight has drawn the attention of Assemblyman Mike Gatto (D-Calif.), who aims to add language to pending tax-incentives legislation. The wording would urge the federal government to impose sanctions, including tariffs, as a way to combat “unfair and illegal competition” from other countries that have hijacked visual effects, music scoring and other post-production work.

The idea of trade sanctions has been opposed by major studios, which otherwise are backers of the incentives legislation, along with unions and guilds. In 2005, the MPAA warned that such sanctions could hurt exports and affect ongoing trade negotiations. Two years later, when the Screen Actors Guild and other locals demanded the U.S. trade representative take action against Canada, the rep refused. Attorney Alan Dunn, who argued for SAG and others in the effort, recently called the politics insurmountable.

This time, the visual effects artists and Adapt are making an end run past the trade rep, by petitioning the Dept. of Commerce and the Intl. Trade Commission, whose decisions are subject to review by the U.S. Court of Intl. Trade. The advantage is that if conditions are met, action is mandatory, according to law firm Picard Kentz & Rowe, which reviewed options last year.

The artists believe their tack is bolstered by the MPAA itself, which has defined digitally transmitted movies as goods, for the purposes of fighting piracy. The MPAA maintains, however, that pirated movies are goods, and effects work is a service. Moreover, studios have said that such a strategy would have no effect on the domestic front as U.S. states or cities could still offer production tax incentives.

Nevertheless, lawyers for Adapt are confident such work that crosses borders is a product. They admit that the strategy, even in victory, is not a long-term solution, but, they believe, it could certainly be a disincentive to the idea of incentives.

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