The United States on Friday criticized proposals to build a European communication network to avoid emails and other data passing through the United States, warning that such rules could breach international trade laws.
In its annual review of telecommunications trade barriers, the office of the U.S. Trade Representative said impediments to cross-border data flows were a serious and growing concern.
It was closely watching new laws in Turkey that led to the blocking of websites and restrictions on personal data, as well as calls in Europe for a local communications network following revelations last year about U.S. digital eavesdropping and surveillance.
"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," the USTR said in the report.
Germany and France have been discussing ways to build a European network to keep data secure after the U.S. spying scandal. Even German Chancellor Angela Merkel's cell phone was reportedly monitored by American spies.
The USTR said proposals by Germany's state-backed Deutsche Telekom (Bonn, Germany) to bypass the United States were "draconian" and likely aimed at giving European companies an advantage over their U.S. counterparts.
Deutsche Telekom has suggested laws to stop data traveling within continental Europe being routed via Asia or the United States and scrapping the Safe Harbor agreement that allows U.S. companies with European-level privacy standards access to European data.
"Any mandatory intra-EU routing may raise questions with respect to compliance with the EU's trade obligations with respect to Internet-enabled services," the USTR said.
"Accordingly, USTR will be carefully monitoring the development of any such proposals."
U.S. tech companies, the leaders in an e-commerce marketplace estimated to be worth up to $8 trillion a year, have urged the White House to undertake reforms to calm privacy concerns and fend off digital protectionism.
In the report, the USTR also criticized restrictions on Internet telephony in India and China, foreign investment limits in countries, including China, and efforts to increase the rates U.S. telecommunications operators must pay in order to connect long-distance calls in Pakistan, Fiji, Tonga and Uganda.
(Reporting by Krista Hughes; Editing by Dan Grebler)