US-EU trade talks expected to move on despite spying fight

Negotiations on a $5 trillion trade deal between the United States and the European Union are expected to forge ahead despite outrage in Europe over the U.S. government’s bugging of offices.

Officials from several European governments suggested the talks could be damaged by the spying fight, but U.S. experts said it is more likely that European negotiators will use the controversy as leverage.

“It doesn’t make it worse, it just gives people who don’t want it more ammunition,” said Bill Reinsch, president of the National Foreign Trade Council.

{mosads}The Obama administration on Monday sought to contain damage from reports that the U.S. had bugged European Commission offices in New York City and Washington. The reports in The Guardian and Der Spiegel appear to have been based on documents leaked by Edward Snowden, the 30-year-old former government contractor now accused of espionage by the United States.

The reports also said the U.S. had monitored European Commission phone lines in Brussels and had captured some of the commission’s email traffic.

The allegations provided an auspicious curtain raising for the trade talks, which both sides have highlighted as a way to boost the global economy.

French President François Hollande was among the officials who said the revelations were a threat to the talks.

President Obama and Secretary of State John Kerry both suggested the kind of surveillance used by the U.S. is not abnormal, even among allies, something Reinsch echoed.

“Frankly, it comes up every few years,” he said. “We spy on our friends, and there’s no doubt they spy on us.”

An official with another business group said there is some concern the spying fight could pollute the trade talks because the negotiations are delicate in the first place.

“Negotiations are built on a fundamental understanding and trust,” said the source, who nonetheless predicted the revelations would not be a “deal breaker.”

U.S. and EU leaders have vowed to work quickly to complete the ambitious trade deal, which both sides have said will not exclude sensitive sectors and products.

Obama administration trade officials are set to meet with the EU delegation on Wednesday.

To that end, the spying controversy highlights a major disagreement between the partners: how to handle privacy issues.

Reinsch said one way the fight could affect the talks is if the EU seeks to use it as a way to put U.S. trade negotiators on the defensive.

The EU has demanded that the protection of consumer data be a high priority, which is garnering more attention amid the National Security Agency surveillance reports.

Essentially, the United States and EU disagree on the framework of how to best protect that information and what governments and private firms can access, including for commercial purposes.

EU officials see U.S. protections on personal data as inadequate, and U.S. negotiators will want to prevent U.S. companies from being limited by stringent EU rules.

Several business groups following the talks avoided commenting on the spying allegations.

The Chamber of Commerce said it is looking forward to the start of talks next week, but would not comment on the bugging fight.