Pre-2001 from what I've read that is how Echelon worked. The UK would spy on Americans, Americans would spy on the UK, and they would both exchange intelligence to bypass each one's respective laws.

But following 9/11 there would be no way the UK could keep up with the US's new intelligence quantity/demands, so the US started spying on themselves and new laws had to quickly get penned to make that retrospectively legal.

Thanks for pointing this out. I've brought this up many times, but people seem to gloss over it. These more recent programs simply remove red tape. This has been going on at least since the Regan administration(perhaps before with Carter). While it may be "illegal" to spy on your citizens, there's nothing against spying on your ally's populace and then having them reciprocate the favor. Share intelligence reports and you are now successful in spying on the entire world.