Data privacy shapes up as a next-generation trade barrier

By Krista Hughes WASHINGTON (Reuters) - Revelations about U.S. digital eavesdropping have fanned concerns about Internet privacy and may complicate U.S. attempts to write rules enshrining the free flow of data into trade pacts with European and Pacific trading partners. "Restrictions on information flows are trade barriers," Google's executive chairman, Eric Schmidt, said at a Cato Institute event last month, warning that the worst possible outcome would be for the Internet to turn into "Splinternet." The unease of U.S. technology companies has mounted in lockstep with rising worries overseas about data privacy. German Chancellor Angela Merkel -- a target of U.S. spying -- has called for a European Internet protected from Washington's snooping. Brazil and the European Union plan to lay their own undersea communications cable to reduce reliance on the United States.



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