The revelations by Edward Snowden that the U.S. National Security Agency (NSA) has been engaged in pervasive and seemingly all-encompassing surveillance activities not just on U.S. citizens but on the governments of friends as well as foes, is starting to have significant consequences. In fact, the rocket’s red glare of suspicion and anger erupted around the July Fourth U.S. Independence Day celebrations as the European Union (EU) voted 483 to 98 in favor of ending the two critical data collections programs if the U.S. didn’t “suspend and review” those programs that “violate the fundamental right of E.U. citizens.”

These are non-trivial programs. They have been identified as the Terrorist Finance Tracking Program (TFTP) and the Passenger Name Record (PNR). Instituted as cooperative intelligence community activities soon after the September 11, 2001 terrorist attacks on the U.S., information collected includes banking and travel data. Together they are viewed as integral in helping track terrorist activities around the world. 


Images via Shutterstock

The EU decision comes during a week where the chorus of concern over U.S. snooping on allies has increased. Neelie Kroes, the European Commission (EC) vice-president who speaks on digital affairs, predicted, "If businesses or governments think they might be spied on, they will have less reason to trust cloud, and it will be cloud providers who ultimately miss out. Why would you pay someone else to hold your commercial or other secrets if you suspect or know they are being shared against your wishes?" she said.

"It is often American providers that will miss out, because they are often the leaders in cloud services. If European cloud customers cannot trust the United States government, then maybe they won't trust U.S. cloud providers either. If I am right, there are multibillion-euro consequences for American companies. If I were an American cloud provider, I would be quite frustrated with my government right now."

The backdrop for all of this is the beginning of long-planned EU-US free trade talks scheduled to begin on July 9 in Washington, D.C. Reservations had been voiced by various EU politicians that these talks seem to have lost their relevance if the U.S. has indeed been spying on its allies, but the EU has decided to proceed despite the concerns. 

What the EU representatives have not agreed upon is how to respond to a U.S. offer to hold simultaneous talks on the NSA scandal. Dalia Grybauskaite, the President of Lithuania, who takes over the rotating six-month EU presidency this week, expressed optimism that such talks would commence stating that, "They are open to co-operation. They are open to explain," she said. "I never seek an apology from anyone. I seek information … We don't want to jeopardize the strategic importance of free trade."   

As numerous postings on the subject have noted this is a very delicate matter. While the EC takes the lead on issues of data privacy, the intelligence and espionage problems would have to be dealt with via government to government talks. This has led to interesting speculation as to how the British, German and French governments (the latter with a brewing intelligence gathering program) might decide to react in such discussions. The reason is there is linkage between the talks since the suspicion in the EU is that much of the U.S. surveillance, if true, has been aimed at commercial and industrial espionage and not solely at looking at terrorist activities further amplifying Kroes remarks.

Washington, D.C. is not a great place to be in the summer. It is hot and humid which just in general makes for people being grumpy. As a result of the scandals and the need to update the trade agreements, things are about to get a whole lot hotter. It will be interesting to watch what unfolds this coming week.