Has NSA spying put US-EU trade deal on the rocks?

Revelations that the United States has systematically spied on Europe are threatening what is being billed as a pivotal moment for the transatlantic relationship: the start of negotiations next week for a major trade deal.

The latest disclosures from Edward Snowden, the former National Security Agency (NSA) contractor, came in a report over the weekend in the German daily Der Spiegel, alleging that the NSA bugged European Union offices and that half a billion phone calls, e-mails, and text messages from Germany alone are tapped by the US in an average month – far surpassing the average attention given to other European allies. In fact, Germany is spied on just as often as China or Iraq, the paper claims.

If the extent of US surveillance in the world is not surprising to some, it’s still controversial in Europe, especially in countries like Germany that place a high priority on data privacy. But the timing of the revelations, as negotiations for the Transatlantic Trade and Investment Partnership (TTIP) are set to begin July 8, has created a firestorm, says Johannes Thimm, an expert on US foreign policy at the German Institute for International and Security Affairs in Berlin.

“There are economic interests involved on both sides, and while the [TTIP] is generally in the spirit of cooperation, there are some trade-offs and really hard negotiations ahead,” Dr. Thimm says. American ability to access that communication as it is playing out, he says, gives the US “a huge strategic advantage."

The Spanish daily El Pais quoted a slew of EU officials voicing their outrage. The European commissioner for justice and fundamental rights, Viviane Reding, said plainly: "Partners do not spy on each other," she said. "We cannot negotiate over a big transatlantic market if there is the slightest doubt that our partners are carrying out spying activities on the offices of our negotiators.”

The European Parliament's foreign affairs committee head, Elmar Brok, reiterated that view. "The spying has taken on dimensions that I would never have thought possible from a democratic state," he told Der Spiegel. "How should we still negotiate if we must fear that our negotiating position is being listened to beforehand?"

The anger has generated not only threats that the TTIP is at risk, but that a cloud looms over the entire transatlantic relationship. Germany Justice Minister Sabine Leutheusser-Schnarrenberger said the fact that  “our friends in the US see Europeans as enemies exceeds the imaginable.” The president of the European Parliament, Martin Schulz, said that “if this is true, it’s an immense scandal that could have a severe impact on relations between the EU and the US.”

He added on French radio: "I was always sure that dictatorships, some authoritarian systems, tried to listen ... but that measures like that are now practiced by an ally, by a friend, that is shocking, in the case that it is true," he said on France 2.

Writing in Le Monde, Corine Lesnes says that “the transatlantic gulf is yet again gaping," she writes. "The electronic spying of the European Union by the NSA provokes an outcry in Europe, while the Americans minimize the facts, even though they understand European indignation,” she writes.  “[Mr. Snowden] is succeeding in reopening the transatlantic wound.”

France's Foreign Minister, Laurent Fabius, has demanded a response from the US, echoing larger EU concerns.

The EU has demanded immediate answers. "As soon as we saw these reports, the European External Action Service made contact with the US authorities in both Washington D.C. and Brussels to seek urgent clarification of the veracity of, and facts surrounding, these allegations," Catherine Ashton, the EU's foreign-policy chief, said in a statement.

"The US authorities have told us they are checking on the accuracy of the information released yesterday and will come back to us as soon as possible," she said. 

But discontent is likely to be at its peak in Germany, not only because of the sheer volume of scrutiny, but because its citizens’ demand for privacy is deeply ingrained, a legacy of the widespread surveillance by the Stasi in East Germany and the Gestapo in Nazi Germany.

President Obama visited Berlin last month, after Snowden revealed details of the controversial surveillance program known as PRISM, receiving a cooler welcome than during his 2008 trip as a presidential candidate, according to The Christian Science Monitor's correspondent in Berlin. 

On the day before his arrival in the German capital, protesters were carrying placards through the city center, reading “Yes, we scan!” or depicting Martin Luther King Jr. and Obama, the former with the caption “I have a dream,” the latter with “I have a drone.”

The Obama administration attempted to play down the scandal before the trip. “We understand the significant German interest in privacy and civil liberties,” the president’s deputy national security adviser, Ben Rhodes, told reporters. As The Wall Street Journal reported: "Mr. Obama will seek to reassure Ms. Merkel that the Prism program is limited to detecting terrorist plots and has safeguards against abuse, Mr. Rhodes said."

Now the narrative is different. And if industrial espionage or spying on banks become clear motivations in the NSA surveillance, the outcry will grow, says Josef Braml, a transatlantic expert at the German Council on Foreign Relations in Berlin. Germany and the US are partners, but they are also competitors with different visions of how to steer the current economic crisis. "On the economy we couldn’t be any more different," he says.

He doubts this is a simple question of terrorism. “I expect this to go much farther.”