Extending anti-dumping duties against footwear from China and Vietnam risks Europe’s long-term commercial relations with both countries, the UK business secretary has warned.

There was no longer justification for the duties, said Lord Mandelson, who initiated the measure in 2006, as he expressed concern about waning enthusiasm for free trade across the European Union as a result of the economic crisis.

“You have a more inward-looking ‘let’s keep hold of what we have’ attitude growing within member states,” he said after a speech in Brussels where he called for a stronger and more decisive Europe.

“The job of the European Commission is obviously to take note of the political pressures but not to be swayed by them,” he said.

Footwear duties have proved highly divisive since Lord Mandelson, as European trade commissioner, first imposed them when low-price imports took market share from small European manufacturers, particularly in Italy and Spain.

At the time, the Commission reported “compelling evidence” of dumping and the trade commissioner said: “It is important that we act against unfair trade while encouraging legitimate and competitive trade from emerging economies. We do not target China and Vietnam’s natural competitive advantages, only unfair distortions of trade.”

Tariffs of 16.5 per cent for Chinese imports and 10 per cent for Vietnamese were set for a two-year period instead of the typical five, reflecting the deep misgivings of other member states, such as the UK and the Netherlands, which have derided them as protectionist. Large footwear retailers, such as Clarks and Adidas, have also opposed the measures.

The Commission and member states are expected to reach a final decision on the matter at on November 19. Baroness Ashton, trade commissioner, last month issued a preliminary recommendation for a 15-month extension, arguing that European market share had only just begun to recover.

But Lord Mandelson said: “I think this would be taken negatively by China and Vietnam and would not help our long-term trade interests with both countries,”

There was no evidence that the alleged dumping was hurting European manufacturers, since their market share was recovering, and that consumers would be harmed, said Lord Mandelson, who had expressed his “very great concern” to Baroness Ashton last week.

Amid intense lobbying from both sides, Baroness Ashton has insisted that her final decision will be guided by anti-dumping law and the evidence at hand.

Baroness Ashton has used her short tenure in Brussels to urge vigilance against protectionism at a time when the economic crisis is pressuring governments to favour national industries.

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By Joshua Chaffin in Brussels

Published: November 8 2009 23:35 | Last updated: November 8 2009 23:35

Source: www.ft.com