E-Minister Patricia Hewitt has admitted that more work needs to be done before Europe and the US can exchange personal data without infringing the rights of European citizens.
Following a fact-finding tour of the east coast of the US, Hewitt said her trip had confirmed that data privacy is a growing issue that needs resolution.
Although the US and Europe had agreed on a data privacy scheme called Safe Harbour, several European nations are unhappy that the scheme does not protect European citizens.
Under the scheme, which has been 18 months in discussion, US firms would be able to sign up voluntarily to data protection principles, by which they would be bound, with agencies such as the Federal Trade Commission overseeing them.
Hewitt agreed that despite the headline agreement, much work has to be done on both sides to ensure that it works effectively. "We have to understand each other's position. Data processing is a global and now a national issue," she said.
Meanwhile, US businesses and government have failed to give full backing to a ground-breaking data privacy scheme, despite agreeing to the Safe Harbour model. The Privacy Code of Conduct, created by the International Commerce Exchange, is being updated to advise IT managers how to use safe harbour. In Europe the code has been promised funding from countries including France, The Netherlands and Italy.
However, according to an International Commerce Exchange spokesman, the US has made it clear that it does not want generic codes developed which might become global standards.
Nick Mansfield of Shell Services International, a driving force behind the code's creation, said the US position was no surprise and reflected its starting position in many international negotiations. "If you are an IT director and you want to know where to start on privacy, the code of conduct is what you should follow." he said.