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Berlin seeks privacy rules in EU-US trade pact

Financial Times

Berlin seeks privacy rules in EU-US trade pact

By Stefan Wagstyl and Jeevan Vasagar in Berlin and James Fontanella-Khan in Brussels

3 November 2013

Germany is to push for tough data protection controls to be included in a proposed EU-US free trade pact in the latest sign of the growing impact of the outrage triggered by Washington’s mass surveillance and concerns about industrial espionage.

Berlin is to press the European Commission to incorporate data safeguards in the negotiations for the planned Transatlantic Trade and Investment Partnership, launched this year by EU leaders and US President Barack Obama.

The move could prompt a clash with Brussels, which fears that introducing privacy rules in the talks could delay or even derail the deal.

Brussels officials say the development comes as “a big surprise” and follows hot on the heels of a call made last week by Viviane Reding, the EU’s top justice commissioner, to keep privacy rules out of the trade talks.

Berlin’s unexpected move highlights the anger generated in Germany by claims that American intelligence eavesdropped on a wide range of targets, including Chancellor Angela Merkel. German officials are particularly angry that even when Berlin set up high-level talks with Washington over the extent of US surveillance activities earlier this summer, US officials failed to disclose the monitoring of Ms Merkel’s mobile phone.

Even though German officials insist the relationship with Washington remains strong, Ms Merkel’s position seems to be hardening in response to the public controversy and to concerns in German business about commercial spying. Industry representatives said they were aware that the question of data protection was being “politically discussed” in the context of the trade deal talks.

The proposed safeguards in the trade pact would not be catch-all privacy rules but specific regulations to protect companies worried about industrial espionage.

Berlin’s move particularly surprised Brussels officials because at the EU leaders’ summit, held just a week ago. Germany said it would pursue a bilateral agreement with the US on data protection.

Ms Merkel’s views appear to be evolving rapidly. At the recent EU summit she distanced herself from a suggestion from Martin Schulz, the German Social Democrat president of the European parliament, to put the trade talks on hold pending a discussion of data protection. She said then that linking the two issues was not raised at the summit.

Also, Germany failed at the summit to support steps to proceed quickly on Europe-wide data protection laws, seen as the EU’s most effective tool in thwarting US eavesdropping.

Assuming that Berlin persists in linking trade and data protection, EU officials said they would seek a compromise. They said that Brussels could try to reach a parallel agreement with the US on data protection, without upsetting the ongoing trade talks. “This would be a more pragmatic approach, we’ve done this before with other trade agreements,” said one.

But it may still be difficult. Data protection standards were not included in the trade talks mandate agreed by all EU member states in June.

A move to do so now would require blocking the current negotiations with the US, which started in July, and setting up a new mandate agreed by all 28 EU members, the European Commission official said. “This is new and potentially very dangerous,” the official said. “It could seriously affect talks . . . we would have to start the process all over again.”