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Not applicable

I think it's best to create different XPD files for each language and add an XML tag <language>countryCode</language> to your XML dataset and XSD file. this way you could tell the workbench to use a different xpd file for generating the PDF file.

Anyway if you want to load an XML file from your local filesystem you should check out this URL: http://www.c-point.com/JavaScript/articles/file_access_with_JavaScript.htm it shows you how to read & write files using javascript.

The problem you'll be facing is editing the binding and reading + validating the given XML file. Especially validating the XML vs the XSD file used in the designer will probably cause a few errors, yet this is highly recommended in order to make sure you're not modifying your PDF with the wrong (or even malicious) data.

Security-wise i would not implement it your way but make a different XPD file for each language. In the LiveCycle Workbench you can select the correct XPD file based on the data you provide. Then it's just the user who needs to specify his/her language and your pdf is always build correctly. Yet I do not know if this is applicable to your situation and/or needs.