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US artists and musicians, unable to get Congress to grant them royalties for their performances broadcast over terrestrial radio networks in the US, continue to try to obtain in foreign countries what they cannot get at home. Sometimes they have been successful, as in the case of Canada where as part of the update of NAFTA and its replacement by the Canada-US-Mexico (CUSMA) Agreement (or USMCA if you prefer) in 2020, Canada granted US performers “national treatment”. This means they get treated “no less favourably” than—i.e. just as well as—Canadian performers with respect to royalty payments. In other words, they get paid. Canadian performers in the US also get national treatment, which means they get treated just as badly as their US counterparts, receiving no royalties at all when their music is broadcast terrestrially. The US music industry, or at least the part of it affected by US restrictions on royalty payments (performers and labels), has long lobbied to remove this inequity. A few years ago legislation designed to fix this problem, the American Music Fairness Act, or AMFA, was introduced into Congress. As I explained at the time;
“US terrestrial radio stations are not required to pay royalties to performers or labels for playing recorded music on air. Online broadcasters and streaming services do, but not over-the-air AM/FM radio stations. Terrestrial stations do, however, pay royalties to composers and songwriters for music played on air, but not to performers.”
It is a strange, assymetric exemption from the requirement to pay royalties. Passage of AMFA would close this loophole by ensuring that performers (artists, singers and musicians) as well as owners of the sound recording copyright, normally labels, receive royalties when a work is broadcast commercially on terrestrial radio. But the AMFA bill, and successive versions introduced since, did not make it across the finish line.
If this seems odd and inequitable, it is. It relates to the influence of the National Association of Broadcasters (NAB) in Congress. For decades the NAB has managed to block legislation that would fix this anomaly by arguing that terrestrial stations provide “free airtime” that promotes new recordings. This is a specious argument akin to the canard that platforms distributing pirated content promote legitimate business by giving new content greater exposure. If the “free exposure” argument was ever valid, it is no longer in a world where new music is promoted on digital radio channels and through Spotify, YouTube and Tiktok. Nowadays, triggering algorithmic discovery is key, yet over-the-air radio stations are still getting a free ride when playing recorded music. Given the strength of the NAB lobby don’t look for AMFA to pass Congress any time soon, despite the concerted efforts of the American Federation of Musicians. And it is not just a US problem. Not only do US performers not get paid when their music is broadcast terrestrially on radio in the US, neither do non-US performers or labels. This leads to another dimension of the issue.
The failure to allow foreign performers to collect royalties in the United States usually has a knock-on effect for US artists when their music is played abroad–unless the US has been able to obtain national treatment through a special bilateral agreement. Performers’ organizations in other countries object to US musicians being granted royalties in their own country because if US artists gain access to a national royalty pot, the amount paid out to domestic performers is reduced (by the amount paid to US artists). When US artists are denied royalty payments on the basis of reciprocal as opposed to national treatment, the collected royalties that would normally go to American performers are redistributed to domestic counterparts or retained by performing rights organizations for the benefit of the domestic music industry as a whole. Normally, payments going to US performers abroad would be offset by payment of royalties in the US to foreign musicians–and everyone would gain–but because of US legislation, the US royalty revenue stream for this music category is non-existent, for everyone. Therefore, from the point of view of domestic musicians, it is unfair for US artists to expect a benefit abroad that is denied to foreign performers in the US. International copyright treaties allow for withholding of national treatment benefits under the principle of material reciprocity. Put bluntly, this means that “If you withhold royalty payments from our performers, we will do the same to yours”.
While material reciprocity is a well recognized principle of international copyright, it’s not all that simple because there are provisions in some international treaties that require national treatment (i.e. payment of royalties) for recordings based on where they are first released even if the artists themselves are from countries (like the US) that deny royalty benefits. This would override reciprocity provisions. In 2020, the EU Court of Justice ruled that denial of royalties to US performers in Ireland on the basis of reciprocity was inconsistent with EU law, which does not mention reciprocity. Since then the Netherlands and Sweden have dropped the reciprocity rule and allow payment to US performers, but most EU countries still do not. Nor does the UK, a non-EU member since January 31, 2020.
It is ironic that Ireland was the jurisdiction where US performers made a legal breakthrough in terms of overseas royalty payments given the WTO Irish Music case. Here the US continues to ignore a WTO panel finding made over 25 years ago, in 2000. The WTO panel ruled that another royalty exemption, in this case a US law that allows business establishments to play licensed music without royalty payments as long as it is “background music”, is non-compliant with US treaty obligations. The US Administration at the time was unable to get Congress to amend the law and offered to pay compensation, but this lasted only three years. This case remains an outstanding irritant between the US and the EU, with the US continuing to say that it will “work closely with the U.S. Congress and will continue to confer with the European Union in order to reach a mutually satisfactory resolution of this matter.” So far nothing has happened, and Irish musicians are out of pocket at least $1 million dollars a year for Irish music played as background entertainment in US business establishments. (i.e. Irish pubs in the US).
If you are looking for consistency in abiding by trade obligations when it comes to large countries versus small ones, you will be disappointed. The Irish Music Case is a good example of assymetric respect for international trade rules. The Donald Trump technique of respecting trade obligations very selectively, or not at all, is not a new phenomenon, although it is far more apparent today. In any event, if you are an advocate for a particular constituency, such as US performers, consistency is not the issue. Results are. It was in this vein that the American Federation of Musicians (AFM) challenged recent British legislation that denied payment of royalties to US performers. The UK has maintained the principle of material reciprocity for many years, but its recent accession to the CPTPP Trade Agreement (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) opened the door, or so thought the AFM , to revisiting the issue. They brought forth a number of interesting arguments, but in the end did not prevail. In my next blog post, I will look at the issues raised, and the reasons for the British court’s decision.
At the end of the day, the best solution for everyone would be to close the US loophole. This would eliminate the reciprocity issue once and for all. Maybe it’s time the AFM redoubled its efforts to fix the problem at home.
© Hugh Stephens, 2026. All Rights Reserved.
