Following Edward Snowden's revelations that the U.S. is spying on people and governments across the world, European Union countries have floated proposals to build a Europe-centric communications system designed to bypass NSA surveillance.

But on Friday, the top U.S. trade negotiating body charged that such a move would violate international trade law.

"Recent proposals from countries within the European Union to create a Europe-only electronic network (dubbed a 'Schengen cloud' by advocates) or to create national-only electronic networks could potentially lead to effective exclusion or discrimination against foreign service suppliers that are directly offering network services, or dependent on them," states a report released Friday by the office of U.S. Trade Representative Michael Froman.

The USTR takes aim at the German state-backed Deutsche Telekom for advocating laws to stop European electronics data from being routed outside the EU in a bid to protect privacy.

The report slams this approach as "draconian" and charges that it "appears to be a means of providing protectionist advantage to EU-based ICT suppliers."

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