British retailers lose battle as Europe U-turns on tariff

The European Union U-turned on the controversial shoe tariff yesterday, disappointing retailers by voting to extend duties on imports from Asia.

British shoe-sellers have campaigned hard against the proposal to extend the tax of 16.5 per cent on shoes from China and 10 per cent on those from Vietnam. And, backed by the Business Secretary, Lord Mandelson, the "no" lobby were successful at a preliminary vote on the measure last month. But after yesterday's volte-face in Europe, the tariff will remain for a further 15 months.

The move was condemned by retail groups. "It's a green light for failing EU companies that the Commission will step in and protect them from foreign competition," Alisdair Gray, of the British Retail Consortium (BRC), said.

The rules were introduced in 2006 to protect shoemakers who typically make more upmarket shoes, particularly those in Italy, Spain and Portugal. It was supposed to run for two years, but was extended in 2008.

The fight start in November, when Britain's shopkeepers warned that an extension of the tariff would deal a "hammer blow" to recession-hit retailers and damage Europe's trade interests with Asia. The BRC estimates that the duties add £1.60 to a pair of imported shoes, putting £330m a year on UK shoe buyers' total bill.

Lord Mandelson attacked both the specific decision and the principle behind it yesterday. "Continuing these measures damages trade, harms the reputation of Europe and forces consumers to pay higher prices at a time when they can least afford it," he said. "We have fought hard to see the end of these measures and I hope the EU will in future see the importance of turning its back on protectionism."