24.10.

2013

CLIPPING INTERNACIONAL NEGINT

Quinta-Feira Feira, 24 de outubro de 2013 201

ndice
I. II. OMC______________________________ 2 NEGOCIAES REGIONAIS E BILATERAIS 4
WTO releases annual package of trade and tariff data ___________________ 2

US-China China trade talks a 'turning point' in relations_______________________ 4 Auto Dispute Weighs on Japan-U.S. Japan Trade Talks________________________ 6 China says Australian trade deal likely within a year ____________________ 7 Taiwan eyes deeper trade ties with India _____________________________ 8 Mercosur repetira historia de la CAN en negociacin con la Unin Europea___ 9 Presidente Cartes visita el viernes a Mujica para cerrar el crculo de acercamiento al Mercosur ________________________________________ ________________________________ 11

III. OUTROS _________________________ 13

Tales from the Crypto Community__________________________________ ________________________________ 13 Germany, France united in anger over U.S. spying accusations ___________ 17

24.10.2013

I. OMC

WTO releases annual package of trade and tariff data

4-traders
International Trade Statistics 2013 provides a detailed overview of world trade up to the end of 2012, covering merchandise and services trade as well as, for the first time, trade measured in value-added added terms. The new data covers both goods and services traded in global value or production chains. Its inclusion reflects the fact that companies nowadays divide their operations across the world, from the design of the product and manufacturing of components onents to final assembly. Providing data in value-added value terms seeks to address the distortion that may result from attributing the full commercial value to the last country of origin.

Through the use of extensive charts and maps, International Trade Statistics Statis illustrates noteworthy trends in global trade with links to numerous tables containing more detailed data. A methodological chapter explains how the data is compiled.

The publication serves as an invaluable reference tool for researchers, policy makers make and anyone interested in international trade. It is available first in electronic format with a print version to follow in November. Data can be downloaded from the WTO web site in Excel and PDF formats and from the searchable database as well as from the WTO's International Trade and Market Access data online application. application. The PDF version of the entire publication in English is now available on the web site. French and Spanish versions will be available by end-October. end

To further improve the quality of the publication, we invite you to provide your feedback by filling in the ITS 2013 Survey. Survey

World Tariff Profiles 2013- a joint publication of the WTO, the International Trade Centre (ITC) and the UN Conference on Trade and Development (UNCTAD) - provides comprehensive tariff information on all WTO members and a number of other othe countries where data is available. It is the only compilation of tariff information of its kind available to researchers and negotiators.

24.10.2013

The publication summarizes the market access that each country offers to imports as well as the market access conditions conditions faced by its products in its major export markets. The profiles show both the maximum tariff rates that are legally "bound" in the WTO and the rates that countries actually apply. The technical annex in this year's issue focuses on WTO members' participation ipation in regional trade agreements (RTAs), with complementary data provided on tariff elimination in RTAs notified under the WTO's Transparency Mechanism.

provides the latest information on trade flows and the trade policy Trade Profiles 2013provides measures of WTO members, observers and other selected economies. With information for each of these provided in a standardized format, the publication is a quick reference tool for anyone looking for essential trade statistics.

The data provided include basic economic indicators (such as gross domestic product or GDP), trade policy indicators (such as tariffs, import duties, the number of disputes, notifications outstanding and contingency contingency measures in force), merchandise trade flows (broken down by broad product categories and major origins and destinations), services trade flows (with a breakdown by major components) and industrial property indicators. With one page devoted to each economy, TradeProfiles offers a concise overview of global trade.

Services

Profiles

2013provides provides

statistics

on key

"infrastructure services",

i.e.

transportation, telecommunications, munications, finance and insurance, for 140 economies. Coverage will be gradually expanded in future editions.

The information is derived from multiple sources, such as national accounts, employment statistics, balance of payments statistics, foreign affiliates' affiliates' trade in services (FATS) statistics, foreign direct investment (FDI) statistics and quantitative indicators largely sourced from international/regional organizations and specialized bodies. The profiles reflect data as contained in the WTO's Integrated Integrated Trade Intelligence Portal (I-TIP) (I services database as of July 2013.

All three profiles - World Tariff Profiles, Trade ProfilesandServices

Profiles- are now

available in the WTO Statistics Database in Excel and PDF formats, , and the PDF versions are also available in English on the WTO web site. The French and Spanish versions will 3

24.10.2013

be available by end-October. October. The printed versionswill be available vailable in November in English, French and Spanish. World Tariff Profiles is also available on request as an application for mobile devices.

All three profiles and International Trade Statisticscan be ordered from the WTO WT bookshop.

The WTO Statistics web page also contains updates of the International Trade and Market Access data online application application, the Statistics Database, , the Tariff Analysis

Online and Tariff Downloads applications, new versions of World and Regional Export Profiles (a PDF snapshot of 2012 merchandise exports globally and by region) and World Commodity Profiles (a PDF snapshot of 2012 merchandise exports and imports for total merchandise trade, , agriculture, fuels and mining and manufactured products), and World maps, , which allows for comparison between countries or customs territories on selected economic indicators.

II. NEGOCIAES REGIONAIS E BILATERAIS

China trade talks a 'turning point' in relations US-China

China Daily
Beijing ready to advance BIT talks with Washington, says diplomat diplom

The Bilateral Investment Treaty talks between China and the United States can be an "inflection point" in economic cooperation, a high-profile high profile diplomat said on Wednesday.

Beijing is ready to work with Washington to advance the BIT negotiations, and it welcomes elcomes foreign companies to "share the dividends" of China's new round of reform and development, said Xie Feng, director-general director general of the Foreign Ministry's department of North American and Oceanian affairs.

"China also hopes the US will take measures to provide a fair and sound investment environment for Chinese companies and facilitate healthy development of two-way two 4

24.10.2013

investment," Xie said during a seminar co-sponsored co sponsored by Fudan University and the USUS based Brookings Institution.

The 10th round of talks is being held this week on the BIT, which would boost two-way two direct investment. The talks were put on the fast track after a meeting between President Xi Jinping and US President Barack Obama.

Xie said the talks were being conducted on the basis of pre-establishment pre establishment national treatment, accompanied by a "negative list" approach.

China is taking concrete steps to facilitate the talks, Xie said. The upcoming Third Plenum of the 18th Central Committee of the Communist Party of China will draw up a master plan for deepening reform, including a time frame and road map.

He also referred to the pilot free trade zone in Shanghai, which is intended to broaden investment access and the service sector, with trade facilitation measures introduced to boost both imports and exports.

He estimated that over the next five years, China's merchandise imports will exceed $10 trillion and its overseas investment will reach $500 billion. Outbound trips by Chinese people will reach 400 million. lion.

Another area of cooperation is in the energy sector, Xie noted. He called for an early start of liquefied natural gas exports from the US to China and more collaboration on shale gas development.

Xie also urged the loosening of US high-technology high export ort controls, which he said had long undermined the otherwise swift growth in bilateral trade.

The BIT is probably the most important trade negotiation since the WTO talks, as it complements both the Trans-Pacific Trans Pacific Partnership Agreement and the Transatlantic Transatlanti Trade and Investment Partnership.

These are two parallel free trade pacts in which the US is engaged across the Asia-Pacific Asia region and Europe, said Richard Bush, director of the Center for Northeast Asian Policy Studies at the Brookings Institution. 5

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"I think the BIT opens new doors for a deeper and richer economic relationship, and it would actually be a good steppingstone to include China in future TPP talks," he said.

Kenneth Jarrett, president of the American Chamber of Commerce in Shanghai, said the BIT will benefit US businesses in China by addressing market access issues.

Auto Dispute Weighs on Japan-U.S. Japan Trade Talks

The Wall Street Journal

Divisive issues in the automobile industry continue to weigh on trade talks between Washington and Tokyo, U.S. officials said Wednesday.

Japan this year joined other Asian and Pacific countries working on the Trans-Pacific Trans Partnership, a set of trade negotiations the U.S. is hoping to wrap up as early as December. Separate from the dozen countries hammering out the TPP, the U.S. and Japan, as by far the two biggest economies in the group, are seeking to settle some longstanding trade issues, including access to the Japanese insurance market,

agricultural restrictions and cars.

This third round of our parallel negotiations with Japan yielded some progress, although important work remains particularly in the area of motor vehicles, said Wendy Cutler, the acting deputy U.S. trade representative, in a statement.

Tokyo has long objected to U.S. automobile tariffs, including a high duty on Japanese Japa trucks, and the U.S. says Japans car market isnt fully open to foreign cars. The two countries are discussing a plan to phase out the U.S. tariffs on Japanese autos very slowly as a part of the TPP, and Japan has moved to more than double the number of U.S. vehicles that can be shipped under a preferential program.

Besides the traditional trade issues, some U.S. lawmakers say Japans monetary policy is targeting a weaker yen, a shift that makes Japanese cars more competitive in the U.S. and hurts Detroit roit along the way. The lawmakers want the TPP to address the issue of 6

24.10.2013

currency

manipulation

and

have

discussed

their

concerns

with

U.S.

Trade

Representative Michael Froman and Treasury Secretary Jacob Lew.

The cost of imported vehicles and parts declined 1.2% in September from a year ago, the largest such drop in more than three decades of records, the Labor Department said Wednesday. Japans yen has fallen about 12% against the dollar since the start of the year.

China says Australian trade deal likely within a year

ABC News

China hina appears to have endorsed the new Australian Government's claim that a trade deal between the two countries can be achieved within a year.

Prime Minister Tony Abbott has been criticised for promising to secure a China-Australia China free trade deal within his is first year in office.

After years of failed talks it was seen as overly optimistic. It was also said to be playing into the hands of Chinese negotiators who would use the deadline to bargain hard.

But now senior Chinese politician Wang Yang has said publicly publicly that China and Australia would sign such an agreement within a year.

The politburo member made this comment in a speech to an audience which included Governor-General General Quentin Bryce.

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Taiwan eyes deeper trade ties with India

The Economic Times

Taiwan today said it is looking at enhancing trade and investment ties with India, especially through collaboration in sectors such as IT, food processing and tourism.

"We would like to collaborate with India on sectors like information technology, food processing and tourism," said Chung-Kwang Chung Kwang Tien, Representative of the Taipei Economic and Cultural Center in India.

"India and Taiwan can sign an economic cooperation agreement agreement which will reduce barriers and increase trade volume. Besides, India should consider easing visa restrictions and providing Taiwan with a visa on arrival facility to boost tourism," Tien said at a Taiwan Excellence 2013 Campaign event here.

The two o countries have already signed an investment promotion and protection agreement.

"We want to promote trade and commerce given the fact that India is an emerging market. It has a big labour force, rich natural resources and a young population, which are important mportant ingredients for future development," Tien said.

The foreign direct investment from Taiwan stood at USD 65.56 million in 2011-12 2011 which was 0.04 per cent in the total FDI flow to India.

"We would like to increase the volume of trade with India by 10 per cent in the current fiscal," Tien said.

At present, around 80 Taiwanese companies are operating in India in various sectors. However, Indian companies' presence in Taiwan is still negligible.

Bollywood actress Malaika Arora Khan has been associated associated with the Campaign for the last three years and is its celebrity spokesperson.

24.10.2013

Mercosur repetira historia de la CAN en negociacin con la Unin Europea

Amrica Economa
Esta semana Brasil y Uruguay reafirmaron su compromiso de tener listas sus propuestas para un acuerdo comercial con la UE antes de fin de ao. a

El Mercosur, que alguna vez fue el nio bonito de la integracin latinoamericana, puede verse abocado a repetir la historia de la alicada Comunidad Andina Andina (CAN), la cual enfrenta una divisin interna a causa de los acuerdos comerciales de dos de sus cuatro socios con la Unin Europea (UE) y Estados Unidos.

Esta semana Brasil y Uruguay reafirmaron su compromiso de tener listas sus propuestas para un acuerdo do comercial con la UE antes de fin de ao e instaron a los otros dos miembros fundadores del Mercosur, Argentina y Paraguay, a plantear las suyas "a la brevedad" para hacer una presentacin en bloque.

Sin embargo, las circunstancias pueden poner al Mercosur, como ya le ocurri a la CAN, en una encrucijada en la que unos pases elijan negociar por separado con la UE para no perder la oportunidad de tener como socio al ms importante importante bloque comercial del mundo.

Es difcil que Paraguay presente pronto una oferta, pues no ha regresado al bloque despus del levantamiento de la suspensin con la que fue sancionado tras la destitucin de Fernando Lugo como presidente por el Legislativo paraguayo, en junio de 2012.

Y Argentina, inmersa en la campaa para las elecciones legislativas de este domingo, en las que los sondeos indican que el oficialismo puede sufrir un revs, y con la presidenta Cristina Fernndez convaleciente de una operacin, operacin, no parece estar en sintona con Brasil y Uruguay respecto a la Unin Europea.

El vicepresidente Amado Boudou, a cargo de la presidencia en ausencia de Fernndez, ha sealado hace solo unos das que las negociaciones entre los pases de Amrica Latina y las as naciones ms desarrolladas "siempre han sido muy desbalanceadas" y muchas veces "se ha resignado a la industria nacional a cambio de nada".

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El quinto socio del Mercosur, Venezuela, que entr al bloque casi al mismo tiempo que un Paraguay suspendido sala, a, no participa en las negociaciones con la UE, que fueron reanudadas en 2010 despus de permanecer estancadas durante aos en gran parte por el obstculo insalvable del proteccionismo europeo en materia agropecuaria.

En tiempos del fallecido presidente Hugo Hugo Chvez, Venezuela siempre tuvo una postura contraria a los acuerdos de libre comercio entre los pases latinoamericanos y las grandes potencias.

El motivo aducido por Venezuela para retirarse de la CAN en 2006 fueron las negociaciones que Colombia y Per Per mantenan individualmente con EE.UU. para sellar unos tratados comerciales que entraron en vigor en 2012 y 2009, respectivamente.

Chvez deca que esas negociaciones haban herido de muerte a la CAN, pero el bloque sigue en pie, aunque maltrecho precisamente precisamente por la salida de Venezuela, que era su principal motor econmico, y adems dividido.

Colombia y Per, no contentos con buscar sus TLC con Estados Unidos, se abocaron tambin a la negociacin con la Unin Europea, en la que en un principio participaban tambin Bolivia y Ecuador, que son aliados polticos de Venezuela, Cuba y Nicaragua.

Los acuerdos comerciales de los Veintiocho con los dos pases andinos fueron suscritos en junio de 2012 y entraron en vigor en agosto de 2013.

La UE, que escogi al Mercosur Mercosur como su socio estratgico cuando en la dcada de los aos 90 inici su acercamiento a Amrica Latina, ha logrado paradjicamente acuerdos con pases y grupos de todas las subrregiones latinoamericanas menos con ese.

Mxico, Chile, Centroamrica, el Caribe, Caribe, Colombia y Per son ya socios de los Veintiocho, al contrario que los pases de la regin que precisamente son considerados ms "europeos" por su cultura y la composicin de su poblacin.

Desde luego las posturas irreconciliables en materia de poltica poltica agraria tienen que ver en que la negociacin UE-Mercosur Mercosur no haya dado resultados, pese a que ambas regiones firmaron en 1995 un gran acuerdo marco de cooperacin, pero tambin ha influido el 10

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hecho de que el Mercosur prohbe expresamente a sus miembros negociar negociar con un tercer pas o bloque de forma individual.

Varios analistas y observadores opinan que cuanto ms tarde en llegar el acuerdo con la UE, ms posibilidades hay de que algunos de los miembros de Mercosur se cansen y opten por negociar por separado, separado, como hicieron en su da Colombia y Per en la CAN.

La zona de libre comercio UE-Mercosur UE Mercosur debera haberse hecho realidad en 2005, de acuerdo con el calendario inicial.

El presidente de la Comisin Europea, Jos Manuel Durao Barroso, afirm a mediados de octubre ctubre que "pronto" habr "acontecimientos" en la negociacin entre la UE y Mercosur y destac que los brasileos estn ahora "ms interesados en llegar a un acuerdo".

Presidente Cartes visita el viernes a Mujica para cerrar el crculo de acercamiento al Mercosur

Iberoamrica Central de Notcias Not

Con este viaje se completa la gira en el marco del Mercosur es muy importante" dijo hoy el canciller paraguayo Eladio Loizaga luego de reunirse con el mandatario en Palacio de Gobierno

El presidente paraguayo Horacio Cartes visitar el viernes de esta semana al mandatario uruguayo Jos Pepe Mujica, en un encuentro con el que se cierra el ciclo de visitas bilaterales a los presidentes del Mercosur, bloque que aguarda el retorno pleno de Paraguay antes de fin de ao.

Con este viaje se completa la gira en el marco del Mercosur, es muy importante, dijo hoy el canciller paraguayo Eladio Loizaga, luego de reunirse con el mandatario en Palacio de Gobierno.

11

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El canciller precis que este ser el segundo encuentro que va a mantener Cartes con el presidente Mujica, siendo el primero el que se tuvo en el marco de la asuncin del presidente paraguayo el 15 de agosto pasado

Con la reunin con Mujica se concretar el restablecimiento pleno de las relaciones paraguayas con sus socios fundadores del Mercosur.

Loizaga estim que an antes del viaje de Cartes a Montevideo, la cancillera paraguaya dar a conocer el nombre del embajador propuesto por Paraguay ante el pas oriental,de modo a tener de nuevo un representante diplomtico en ese pas.

Paraguay ya haba conseguido el plcet para la designacin del expresidente Nicanor Duarte Frutos como embajador en Argentina y de Manuel Mara Cceres como representante ante la Repblica Federativa del Brasil.

Al igual que en sus conversaciones con Cristina Fernndez y Dilma Dilma Rousseff, Cartes tiene previsto abordar con el mandatario uruguayo temas relacionados a la interconexin fsica y el intercambio comercial.

Se tratarn temas que hacen a la hidrova, se enfocar la posibilidad de ampliar la cooperacin en materia portuaria, portuaria, teniendo en cuenta de que el Paraguay es usufructuario del Puerto Nueva Palmira, anunci este martes el canciller Loizaga.

Tambin se hablar sobre el Puerto de Aguas Profundas, donde el Paraguay expresar su inters de conocer el avance de dicho proyecto y figura en la agenda un encuentro con empresarios en el World Trade Center.

El canciller afirm que una vez concluida este ciclo de conversaciones, en 60 das se habrn visto los adelantos que se han hecho en el campo de las relaciones internacionales.

Loizaga tiene previsto acompaar al presidente Cartes a Montevideo, donde se reunir con su par uruguayo Luis Almagro, para conversar sobre los mecanismos para el pleno retorno de Paraguay al Mercosur.

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III. OUTROS

Tales from the e Crypto Community

Foreign Affairs
The NSA Hurt Cybersecurity. Now It Should Come Clean.

Of f all of the revelations about the NSA that have come come to light in recent months, two stand out as the most worrisome and surprising to cybersecurity experts. The first is that the NSA has worked to weaken weaken the international cryptographic standards that define how computers secure communications and data. The second is that the NSA has deliberately introduced backdoors into security-critical security critical software and hardware. If the NSA has indeed engaged in such activities, vities, it has risked the computer security of the United States (and the world) as much as any malicious attacks have to date.

No one is surprised that the NSA breaks codes; the agency is famous for its cryptanalytic prowess. And, in general, the race between between designers who try to build strong codes and cryptanalysts who try to break them ultimately benefits security. But surreptitiously implanting deliberate weaknesses or actively encouraging the public to use codes that have secretly been broken -- especially ally under the aegis of government authority -- is a dirty trick. It diminishes computer security for everyone and harms the United States national cyberdefense interests in a number of ways.

BETRAYED

Few people realize the extent to which the cryptography cryptography that underpins Internet security relies on trust. One of the dirty secrets of the crypto world is that nobody knows how to prove mathematically that core crypto algorithms -- the foundations of online financial transactions and encrypted laptops -- are secure. ecure. Instead, we trust that they are secure because they were created by some of the world's most experienced cryptographers and because other specialists tried diligently to break them and failed.

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Since the 1970s, the U.S. National Institute of Standards Standards and Technology (NIST) has played a central role in coordinating this trust, and in deciding which algorithms are worthwhile, by setting the cryptographic standards used by governments and industries the world over. NIST has done an admirable job of organizing organizing the efforts of cryptographic experts to design and evaluate ciphers. It has also been able to harness the clout of the U.S. government to get those designs -- including such state-of-the-art technology as the AES cipher, the SHA-2 2 hash functions, and public-key key cryptography based on elliptic curves -- adopted by industry. In turn, American industry believed that it could trust that these technologies had been designed by a competent organization with its interests at heart.

There is now credible evidence evidence that the NSA has pushed NIST, in at least one case, to canonize an inferior algorithm designed with a backdoor for NSA use. Dozens of companies implemented the standardized algorithm in their software, which means that the NSA could potentially get around security software on millions of computers worldwide. ide. Many in the crypto community now fear that other NIST algorithms may have been subverted as well. Since no one knows which ones, though, some renowned cryptographers are questioning the trustworthiness of all NIST standards.

If the loss of trust in NIST is permanent, the world could return to a time of fragmented national and nd industry standards. That would cause more work for implementers and reduce security for everyone. Computer lore is filled with examples of poor design and flawed industry standards: for example, the encryption that is supposed to prevent copying of DVDs, DVDs the A5/1 cipher that is supposed to secure calls on GSM telephones, and the WEP encryption that is supposed to keep WiFi networks private. All of these standards contain flaws that allow the encryption to be broken, exposing the industries that developed them to embarrassment and financial loss and exposing end users to security vulnerabilities. Even worse than fragmented industry standards would be if some implementers, fearful of backdoors in government-vetted government vetted crypto, turned to snake-oil ciphers that offer fer no real protection. That situation is, of course, entirely avoidable. The NSA knows which standards it has weakened and which ones are unadulterated. It could restore trust by coming clean.

BACKWARD PROGRESS

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Beyond undermining NIST

standards,

NSA

acti activities

have

also shaken confidence

in emerging cryptographic technologies that are among our best hopes for improving cybersecurity in the near term. A central example is elliptic-curve elliptic curve cryptography, which is a next-generation generation technology that, as far as we know in the unclassified world, is superior to what we use today.

For the past few years, NIST and the NSA have heavily promoted elliptic-curve cryptography, , promising better performance and improved security. In light of recent revelations, though, many cryptographers are skeptical of the NSA's motives. Is the NSA backing elliptic-curve curve cryptography to improve security or because it has some secret way to compromise it? After reviewing the documents leaked by former NSA contractor Edward Snowden, the prominent security expert Bruce Schneier pointedly advised against adoption of elliptic-curve curve cryptography.

This was surprising. The common alternatives to elliptic curves are three decades old, and the methods of attacking them have improved to the point that today, the margin of safety for these algorithms is slim. In contrast, there are no publicly known major weaknesses in elliptic-curve curve cryptography. Still, relatively few experts outside the NSA understand it, and adopting the standardized algorithms involves placing trust both in the core technology and in opaque parameters pa published by NIST.

If practitioners are unable to trust new technologies like this because of the possibility of NSA tampering, the technologies are next to useless. Two decades of progress will be tossed aside.

The NSA's activities have also undermined und trust in another otherwise promising new security technology: the hardware random number generator integrated into the latest generation of Intel processors. Random numbers are essential for cryptography -- for example, in selecting unpredictable secret secret keys for encryption. As our own research shows, , poor randomness is a widespread security problem. Many computing devices simply do not have any good source of randomness with which to generate gene secure keys, and this leads to predictable encryption that is easy to break.

Intel's new random number generator could put an end to all that, since it introduces circuitry for producing random numbers into widely used processors. 15

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However, since random om number generators are used to generate secret keys, they are an ideal place for an NSA backdoor. backdoor. It is not possible to look inside the CPU and verify that it's actually picking numbers randomly, as opposed to following some predictable but random-looking looking method known only to the NSA. There is no evidence that the NSA actually did tamper with the Intel random number generator. However, it is not beyond the bounds of imagination: leaked documents reveal that one of the NSA's priorities was to insert insert vulnerabilities into commercial encryption systems" systems just ust like this one. Many developers will simply not take the risk of using it unless the NSA comes clean about which systems it has tampered with.

CYBERINSECURITY

The scariest consequence of the NSA's activities is that they lead to a direct loss of security for everyone who uses technology that contains an NSA backdoor. There is no way to design technology that allows only bad users to be exploited; exploited backdoors make everyone vulnerable.

The NSA has many technical options for building a backdoor. One way is to deliberately decrease the amount of effort required to mount an attack, by reducing the entropy or keyspace available to a cryptographic system, system adding subtle side-channel channel attacks, or introducing deliberate software vulnerabilities. An adversary could detect any of those methods -- through skillful reverse engineering or simply by getting lucky -- and exploit them. The NSA could also have designed designed backdoors that can only be exploited using some secret information: the NIST standard that the NSA is accused of

having backdoored is a pseudorandom pseudora number generator whose state (and thus all of the cryptographic secrets it might ever generate) is predictable if you know a secret master key. Theoretically, such a method is safe as long as the secret key remains secret. But the very fact of the Snowden wden leaks shows that even the NSA can't always ensure that.

For the researchers who work to defend cryptographic systems against attack, the possibility that the NSA deliberately planted backdoors in NIST cryptographic standards is deeply unsettling. The agencys meddling adds a major new cybersecurity threat to a list that was already too long. Many of the nation's most skilled security researchers will waste untold hours ferreting out the backdoors. Some of these weaknesses will be found and others won't, , with the net result that we will only regain some of the security that NSA has cost us. 16

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There are far too many threats to cybersecurity to be worrying about problems created by our own government. The one piece of good news is that, unlike most cybersecurity cybersecu problems, this one can be legislated away. Congress could force the NSA to come clean about which technologies it has weakened or falsely promoted. Several members of Congress have proposed legislation reining in the NSA's mass surveillance tactics. tactics The NSA generally operates within the bounds of the law, and strong legislation requiring NSA to cease these underhanded practices and disclose the technical details of existing backdoors would go a long way to rebuilding trust and repairing the damage that the NSA has caused to everyone's security.

Germany, France united in anger over U.S. spying accusations

Reuters
German and French accusations that the United States has run spying operations op in their countries, including possibly bugging Chancellor Angela Merkel's mobile phone, are likely to dominate a meeting of EU leaders starting on Thursday.

The two-day day Brussels summit, called to tackle a range of social and economic issues, will now be overshadowed by debate on how to respond to the alleged espionage by Washington against two of its closest European Union allies.

For Germany the issue is particularly particularly sensitive. Not only does the government say it has evidence the chancellor's personal phone was monitored, but the very idea of bugging dredges up memories of eavesdropping by the Stasi secret police in the former East Germany, where Merkel grew up.

Following lowing leaks by data analyst Edward Snowden, which revealed the reach of the U.S. National Security Agency's vast data-monitoring data monitoring programs, Washington finds itself at odds with a host of important allies, from Brazil to Saudi Arabia.

In an unusually strongly worded statement on Wednesday evening, Merkel's spokesman said the chancellor had spoken to President Barack Obama to seek clarity on the spying charges. 17

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"She made clear that hat she views such practices, if proven true, as completely unacceptable and condemns them unequivocally," the statement read.

White House spokesman Jan Carney said Obama had assured Merkel that the United States "is not monitoring and will not monitor" the the chancellor's communications, leaving open the possibility that it had happened in the past.

A White House official declined to say whether Merkel's phone had previously been bugged. "I'm not in a position to comment publicly on every specific alleged intelligence int activity," the official said.

German Foreign Minister Guido Westerwelle has summoned the U.S. ambassador to Berlin to discuss the issue.

Germany's frustration follows outrage in France since Le Monde newspaper reported the NSA had collected tens of thousands of French phone records between December 2012 and January 2013.

President Francois Hollande has made clear he plans to put the spying issue on the summit agenda, although it is not clear what that will ultimately achieve.

While Berlin and Paris are likely to find sympathy among many of the EU's 28 member states, domestic security issues are not a competence of the European Union. The best that may be hoped for is an expression of support from leaders and calls for a full explanation from the United States.

"Between friends, there must be trust. It has been shaken. We expect answers from Americans quickly," European commissioner for financial regulation Michel Barnier, Barni a Frenchman, said in a message on Twitter.

DATA PRIVACY RULES

The furor over the alleged espionage could encourage member states to back tougher data privacy rules currently being drafted by the European Union. The European

18

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Parliament this week approved approved an amended package of legislation that would overhaul EU data protection rules that date from 1995.

The new rules would restrict how data collected in Europe by firms such as Google and Facebook is shared with non-EU non countries, introduce the right of EU citizens to request that their digital traces be erased, and impose fines of 100 million euros ($138 million) or more on rule breakers.

The United States is concerned that the regulations, if they enter into law, will raise the cost of doing business and handling data in Europe. Google, Yahoo!, Microsoft and others have lobbied hard against the proposals.

Given the spying accusations, France Fran and Germany - the two most influential countries in EU policy - may succeed in getting member states to push ahead on negotiations with the parliament to complete the data regulations and make them tougher.

That could mean an agreement is reached early next year, with the laws possibly coming into force in 2015. For the United States, this could substantially change how data privacy rules are implemented globally.

It may also complicate relations between the United States and the EU over an agreement to share a large amount of data collected via Swift, the international system used for transferring money electronically, which is based in Europe.

Among the revelations from Snowden's leaks is that the United States may have violated the Swift agreement, accessing essing more data than it was allowed to.

The European Parliament voted on Wednesday to suspended Swift and the spying accusations may make EU member states support a firm line, complicating the United States' ability to collect data it says is critical in combating terrorism.

Despite the outrage in Paris and Berlin, the former head of France's secret services said the issue was being blown out of proportion and no one should be surprised by U.S. spying.

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"I'm bewildered by such worrying naivite. You'd think the politicians don't read the reports they're sent - there shouldn't be any surprise," Bernard Squarcini told Le Figaro.

"The agencies know perfectly well that every country, even when they cooperate on antianti terrorism, spies on its allies. The Americans spy spy on us on the commercial and industrial level like we spy on them, because it's in the national interest to defend our businesses. No one is fooled."

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