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SIGGRAPH: WTO Rule Key to Imposing Duties on VFX Shots

VFX industry leaders discuss a proposed plan aimed at addressing subsidies during a panel at the CG conference.

Visual effects industry leaders are discussing a proposed plan that could potentially be a big step toward addressing the industry's troubled business model, according to a report by The Hollywood Reporter.

Last week they took their message to computer graphics conference SIGGRAPH for a panel session that included a Skype conversation with Washington D.C. attorney David Yocis of Picard Kentz & Rowe.

One of the factors hurting the VFX industry is film incentives, and PKR recently completed a study of international trade law regarding subsidies, commissioned by the anonymously run VFX Soldier blog.

The findings suggest, according to Yocis, that the best potential approach is a World Trade Organization rule that could be used to impose Countervailing Duties (CVD), which effectively means that if a foreign government unfairly subsidizes goods or services (such as rice, semiconductors, cotton or, perhaps, VFX shots), then the U.S. could impose a duty, or import tax, on the goods in a countervailing, or equal and opposite, amount so that the buyer in the U.S. ends up paying market price, rather than the subsidized price.

CVD is generally thought of in the context of commodities, and the big question is if the rule even applies to visual effects. “We think the answer is yes,” Yocis reportedly said, adding that the law is about taxing subsidies that cause injury, and the loss of jobs could apply as injury.

A law firm such as PKR could file the petition on behalf of an organization representing the industry. Putting the petition together will take time and require organization and input from the community. The filed petition would require an investigation of the situation, which could take more than a year, and there could be further delays should there be appeals. The advantage to CVD law is that once the conditions are met, it applies automatically.

Panelist Scott Ross related that VFX Soldier wants to move forward and has started to ask individuals to sit on the board of an entity that would hire the law firm. For the board, VFX Soldier has already reached out to Ross and VFX artist Dave Rand.

Jennifer Wolfe's picture

Jennifer Wolfe is Director of News & Content at Animation World Network.