Europe imposes two-year tariff on shoes from China

The British Government and retail industry launched a strong attack on "protectionist" European states yesterday after the EU voted to impose a two-year regime of steep tariffs on imported shoes from China.

Under a deal approved by a one-vote margin, Europe will impose duties of 16.5 per cent on shipments from China and 10 per cent on imports from Vietnam.

The tariff regime will last for two years rather than the original five-year plan that was voted down last month. That compromise won over Cyprus.

The decision, which extends temporary tariffs that were due to expire on Saturday, is a victory for Italy, which initiated the investigation into under-priced imports, and which lobbied to get long-term tariffs.

Although 12 nations, including the UK, voted against the proposals and only nine voted in favour, the four abstentions counted as yes votes under EU rules. The move will strain already tense trade relations between the EU and China.

The Department of Trade and Industry said it was "very disappointed" at the outcome. "These measures are not in the interests of consumers or the community as a whole," a spokeswoman said. "We remain opposed to the Commission's proposals."

The British Retail Consortium accused member states of "horse trading" to get the duties through. "You can only wonder at what sort of murky deals have been done to get this over the line," Kevin Hawkins, its director general, said.

The Federation of the European Sporting Goods Industry said the tariffs would not protect any jobs. "Europe cannot declare lofty goals about becoming a modern and dynamic economy and at the same time shield inefficient manufacturers from global competition," it said.

Emma Ormond, the international trade consultant at accountants PricewaterhouseCoopers, said: "This must be a wake-up call to countries like Italy to work out what they have to do, otherwise in two years time this will start again."

Peter Mandelson, the EU trade commissioner, sought to head off a row with China by calling for a "rejection of protectionism at home". Unveiling his contribution to the EU's growth and jobs strategy, he said: "We cannot argue for openness from others while sheltering behind barriers of our own."

He said the Commission would launch a public consultation of its anti-dumping and trade defence regime, adding that it could lead to reform.

However, the commissioner fired a warning shot across retailers bows, saying European retailers and importers must not hog the benefits of cheap goods. He said lower costs had not been passed on to consumers after textile quotas expired last year. "The Commission will put in place systematic monitoring of import and consumption prices before considering further action," he said.