USTR Warns That EU-Only Cloud To Avoid NSA Surveillance May Violate Trade Agreements

from the unwise dept

The USTR seems to have a worrying need to blame other countries. Alongside the infamous Special 301 Report which puts a selection of nations on the naughty step because of their failure to bend to the will of the US copyright industries, there's the less well-known Section 1377 Review , which considers "Compliance with Telecommunications Trade Agreements." Here's some information about the latest one (pdf): The Section 1377 Review ("Review") is based on public comments filed by interested parties and information developed from ongoing contact with industry, private sector, and foreign government representatives in various countries. This year USTR received four comments and two reply comments from the private sector, and one comment from a foreign government. Clearly something of a specialist area, then. One of those comments comes from the United States Council for International Business, which describes itself as "among the premier pro-trade, pro-market liberalization organizations." A concern it raises is the following: The ability to send, access and manage data remotely across borders is integral to global services, including converged and hybrid services such as cloud services. However, the tremendous increase in cross-border data flows has raised concerns on the part of many governments. Given that cross-border services trade is, at its essence, the exchange of data, unnecessary restrictions on data flows have the effect of creating barriers to trade in services. That seems to be reflected in the following section of the USTR's review: Recent proposals from countries within the European Union to create a Europe-only electronic network (dubbed a "Schengen cloud" by advocates) or to create national-only electronic networks could potentially lead to effective exclusion or discrimination against foreign service suppliers that are directly offering network services, or dependent on them. In particular: Deutsche Telekom AG (DTAG), Germany's biggest phone company, is publicly advocating for EU-wide statutory requirements that electronic transmissions between EU residents stay within the territory of the EU, in the name of stronger privacy protection. Specifically, DTAG has called for statutory requirements that all data generated within the EU not be unnecessarily routed outside of the EU; and has called for revocation of the U.S.-EU "Safe Harbor" Framework, which has provided a practical mechanism for both U.S companies and their business partners in Europe to export data to the United States, while adhering to EU privacy requirements. Of course, Deutsche Telekom is not the only one calling for Safe Harbor to be revoked: the European Parliament's inquiry into the mass surveillance of EU citizens has also proposed that, along with a complete rejection of TAFTA/TTIP unless it respects the rights of Europeans. Strangely, the USTR doesn't mention that fact in its complaint, but goes on to say: The United States and the EU share common interests in protecting their citizens' privacy, but the draconian approach proposed by DTAG and others appears to be a means of providing protectionist advantage to EU-based ICT suppliers. You've got to love the idea that too much privacy protection is "draconian". The USTR continues to tiptoe around the real reason that not just Deutsche Telekom but even Germany's Chancellor, Angela Merkel, are both keen on the idea of an EU-only cloud: Given the breath of legitimate services that rely on geographically-dispersed data processing and storage, a requirement to route all traffic involving EU consumers within Europe, would decrease efficiency and stifle innovation. For example, a supplier may transmit, store, and process its data outside the EU more efficiently, depending on the location of its data centers. An innovative supplier from outside of Europe may refrain from offering its services in the EU because it may find EU-based storage and processing requirements infeasible for nascent services launched from outside of Europe. The USTR saves what it obviously sees as its killer punch for last: Furthermore, any mandatory intra-EU routing may raise questions with respect to compliance with the EU's trade obligations with respect to Internet-enabled services. Accordingly, USTR will be carefully monitoring the development of any such proposals. Got that, Europeans? If you dare to try to protect yourselves by creating a slightly more secure EU-only cloud in response to the NSA breaking into everything and anything, you may find yourself referred to the World Trade Organization or something....

It's interesting that the USTR brings up this issue -- doubtless a reflection of the huge direct losses that revelations about massive surveillance on Europeans and others are likely to cause the US computing industry. But trying to paint itself as the wronged party here is not going to endear the USTR to European politicians. At a time when Safe Harbor and even the TAFTA/TTIP negotiations are being called into question in the EU, such an aggressive and insulting stance seems a very stupid move.

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Filed Under: cloud, eu, nsa, security, surveillance, trade agreements, ustr