Could the revelations regarding the NSA PRISM program hinder U.S. relations around the world?

Question submitted by Andre Ribeiro, from LaGuardia Community College, October 7, 2013

Answered by: Karen Kornbluh, Senior Fellow for Digital Policy

Revelations about the National Security Agency's (NSA) electronic surveillance program were met with tough words from many of the United States' allies. German leaders criticized the United States and France threatened to delay the start of U.S.-EU trade talks. More recently, Brazilian president DilmaRousseff delivered a searing address to the United Nations General Assembly after canceling a state visit to the White House.
However, these same leaders are aware, as President Obama has pointed out, that their security intelligence services engage in similar activities and, so far, despite the criticism, diplomatic and trade relations have remained largely on track. Russian-U.S. negotiations over Syrian chemical weapons were undeterred, for example, and U.S.-EU trade talks proceeded as scheduled.
Perhaps the more serious long-term threat is to the health of the Internet itself. The revelations may provide a rationale for some foreign governments grappling with ongoing economic as well as privacy concerns to exert more domestic control over data flows. The European Parliament called for a full review of the U.S.-EU Safe Harbor framework which eases digital commerce between Europe and the United States. Brazil announced plans to route Internet traffic around the United States, and is considering measures to store Brazilian users' data on servers located within Brazil. Meanwhile, Russia, China, Syria, and others seeking pretexts to deny their citizens the promise of free speech and freedom to associate offered by the open Internet may attempt to re-energize efforts to use the UN's International Telecommunications Union to gain greater national sovereignty over networks at the expense of the today's multi-stakeholder governance structure.
President Obama has promised a review of U.S. intelligence gathering mechanisms so that we properly balance the legitimate security concerns of our citizens and allies with the privacy concerns that all people share." This review may need reinforcement from U.S. diplomatic efforts to avoid balkanization of the Internet.