Short title

This Act may be cited as the

Protecting American Streaming and Innovation Act

Findings

Congress finds the following: (1)Digital trade is a critical engine of the United States economy, allowing American companies to deliver innovative audiovisual and audio products and services globally, creating high-paying jobs in the United States and exporting American culture and values. (2)The United States-Mexico-Canada Agreement (USMCA), which entered into force on July 1, 2020, includes a robust digital trade chapter intended to prevent discriminatory barriers and ensure a level playing field for North American digital service providers. (3)Canada’s law, the Online Streaming Act, empowers Canadian regulators to apply contribution and discoverability obligations to audio and audio-visual content, resulting in a revenue-based tax that targets American companies. (4)Canada has chosen to exempt domestic streaming companies from these obligations, while applying strict obligations to U.S.-based companies. The contribution obligations currently require U.S. companies to pay mandatory high-percentage contributions based on models derived from traditional broadcasters and direct these funds exclusively to domestic cultural funds. They also require U.S. audio streaming companies to pay twice because royalties paid by audio services to Canadian rightsholders are included in services’ taxable revenue. Discoverability obligations potentially require U.S. companies to undertake costly and technically burdensome platform modifications, including the implementation of invasive data collection and reporting systems, to enforce content prioritization or quotas. These obligations are discriminatory and place a disproportionate burden on United States commerce. (5)These measures appear to contravene Canada’s commitments under the USMCA to provide non-discriminatory treatment to United States digital products and services and avoid unnecessary barriers to digital trade, and appear to be unreasonable, discriminatory, and excessively burdensome towards United States commerce. These measures also appear to be a prohibited performance requirement. (6) Canada has invoked the USMCA cultural industries exception to defend measures like the Online Streaming Act that affect audiovisual and music services. However, the exception traces to the Canada-U.S. Free Trade Agreement era and retains a legacy definition of cultural industry centered on traditional publishing, recordings, and broadcasting, rather than modern means of digital delivery. (7)If left unchecked, Canada’s discriminatory digital policies will set a harmful global precedent, encouraging other nations to adopt similar protectionist digital sovereignty regimes that target successful United States streaming companies and content producers. Trading partners such as Australia, Brazil, Israel, and others have adopted or are considering similar discriminatory digital policies that primarily impact U.S.-based services. Additionally, even within Canada, Quebec is considering an overlapping regime targeting United States companies. (8)It is in the national economic interest of the United States to enforce its rights under trade agreements and statutory authorities and take appropriate action to address foreign practices that are unreasonable, discriminatory, and burden or restrict United States commerce.

Investigation of Canadian digital trade practices

(a)

In general

Not later than 30 days after the date of the enactment of this Act, the United States Trade Representative shall initiate an investigation under section 301 of the Trade Act of 1974 (19 U.S.C. 2411) to determine whether Canada’s implementation of its Online Streaming Act (Bill C-11), including the related regulatory actions of the Canadian Radio-television and Telecommunications Commission (CRTC), constitutes an act, policy, or practice that is unreasonable or discriminatory and burdens or restricts United States commerce. (b)

Consultations

In conducting the investigation required by subsection (a), the Trade Representative shall— (1)consult with affected United States businesses providing online audiovisual or audio streaming services; (2)seek information from relevant trade associations, labor representatives, and cultural organizations; and (3)coordinate with the Department of Commerce, the Department of State, and the United States International Trade Commission. (c)

Determinations and action

(1)

Affirmative determination

If the Trade Representative makes an affirmative determination under subsection (a), the Trade Representative shall— (A)publish such determination in the Federal Register; and (B)consider appropriate action under section 301(c) of the Trade Act of 1974 (19 U.S.C. 2411(c)), which may include the suspension of trade agreement benefits or imposition of duties commensurate with the burden imposed. (2)

Negative determination

If the Trade Representative makes a negative determination under subsection (a) and determines that no action described in paragraph (1)(B) is warranted, the Trade Representative shall transmit to the appropriate congressional committees a report explaining the determination.

Reporting requirements

(a)

Initial report

Not later than 90 days after the date of the enactment of this Act, the United States Trade Representative shall submit to the appropriate congressional committees a report on— (1)the implementation of the requirements of section 3; (2) Canada’s regulatory implementation schedule for the Online Streaming Act (Bill C-11); and (3)the preliminary findings on the impact of these measures on United States digital service providers. (b)

Quarterly updates

The Trade Representative shall submit updates to the report required by subsection (a) on a quarterly basis for a period of two years describing— (1)consultations held with affected stakeholders; (2)any remedial or enforcement actions undertaken; and (3)the state of bilateral engagement with Canada on digital trade issues. (c)

Public summary

The Trade Representative shall make publicly available a non-confidential summary of each report and update submitted under this section.

Retaliatory actions if Canada fails to remedy discriminatory measures

(a)

Determination of non-Compliance

If, not later than 180 days after publication of an affirmative determination under section 3(c)(1), the United States Trade Representative determines that Canada has not taken satisfactory steps to remove or amend the discriminatory measures identified in the investigation with respect to which the determination was made, the Trade Representative shall take appropriate action under section 301(c) of the Trade Act of 1974 (19 U.S.C. 2411(c)). (b)

Forms of action

Actions under subsection (a) may include— (1)the suspension, withdrawal, or modification of trade agreement concessions or benefits to Canada under the United States-Mexico-Canada Agreement or other agreements; and (2) the imposition of additional duties on goods of Canadian origin in amounts commensurate with the harm from implementation of Canada’s Online Streaming Act (Bill C-11). (c)

Notice and consultation

Before taking any action under this section, the Trade Representative shall— (1)notify the appropriate congressional committees of the proposed action; and (2)consult with affected stakeholders to ensure that measures are targeted, proportionate, and minimize unintended consequences for United States consumers and allies. (d)

Termination of action

The Trade Representative may terminate any action under this section if— (1)Canada eliminates or modifies the measures to the satisfaction of the Trade Representative; and (2)the Trade Representative notifies Congress in writing thereof.

Relation to other global free trade agreements

To the extent that any other foreign country with which the United States has in effect a free trade agreement takes actions that are similar to the actions of Canada described in section 3(a), the Trade Representative shall apply the provisions of sections 3, 4, and 5 to such other foreign country.

Definitions

In this Act— (1)the term appropriate congressional committees means— (A)the Committee on Ways and Means of the House of Representatives; and (B)the Committee on Finance of the Senate; and (2)the term online streaming service means any digital service delivering audiovisual or audio programming to users in Canada via the internet.