By Doug Palmer

WASHINGTON (Reuters) - Countries need to forge new trade rules governing the movement of electronic data across borders as the world becomes increasingly connected, a Microsoft official said on Wednesday.

As more and more software services are provided over the Internet, "people will be calling on computers located around the world," said Brad Smith, senior vice president and general counsel for the U.S. software giant.

"We have a patchwork of laws around the world that is increasingly creating a very confusing almost quagmire for information providers," Smith said at the Global Services Summit -- a meeting that brought together banking, telecommunications, shipping and other service industry professionals.

Resource Library:

One country may insist that e-mails be kept for a year for security purposes while another requires they be erased after six months to protect privacy, he said.

"If that's the case, it's very difficult to locate a data center in one country and provide that service to consumers in another country," Smith said.

Technology will continue to change and "the trade rules will need to change in order for these benefits to continue to flow around the planet," Smith said.

Former U.S. Trade Representative Charlene Barshefsky, in a speech to the same group on Tuesday, suggested the creation of a new Internet trade agreement to foster the delivery of software services across borders.

Smith did not endorse that approach, saying a variety of mechanisms mechanisms may be appropriate.

Peter Cowhey, a senior counsel in the U.S. Trade Representative's office, told the service group the Obama administration was taking a comprehensive at trade rules governing information communication technology.

There are a number of "barriers at the border" that potentially could be addressed through the World Trade Organization or bilateral forums, Cowhey said.

Those include a conflict between globally coordinated standards for information communication technology and national standards some countries have pursued, he said.

It also is important that legitimate efforts to boost cybersecurity are done in a way that maximizes global efficiency and commerce, Cowhey said.

Consumer choice and data privacy issues, as well as the procedures that governments follow when they restrict access to global information services are other areas that might be ripe for international rule making, he said.

(Editing by Mohammad Zargham)