A trade dispute over tariffs on cheap Chinese shoes is brewing at the European Commission as Italian and Spanish footwear manufacturers prepare to fight for continued European protection against Far Eastern imports.

The Commission is considering an extension of anti-dumping duties put in place in 2006 to protect the European Union’s footwear manufacturers from import surges. The measures — a 16.5 per cent duty on Chinese shoes and a 10 per cent tariff on Vietnamese footwear — are strongly opposed by retailers and most EU member states, including Britain.

Lord Mandelson, in his former role as European Trade Commissioner, extended the tariffs in October last year for a further 12 months, pending a review of the market. The Commission must decide on October 22 whether to maintain the tariffs, which otherwise would be lifted in January.

A decision to maintain the tariff wall will worsen East-West trade tensions as the World Trade Organisation tries to rally support for completion of the Doha Round of trade negotiations. President Obama gave his backing this month to anti-dumping measures against imports of Chinese car tyres, a protectionist move that was widely criticised for pandering to American labour unions.

The European tariffs against Asian footwear were imposed in response to a surge in Chinese textile and leather imports and signs of distress among traditional footwear manufacturers in Italy, France, Spain and Poland.

However, 15 member states, mainly from Northern Europe, opposed the duties and want the measures to be lifted. Opposition is vigorous from big retailers and manufacturers, such as adidas and Nike, the sports shoe brands, which source their products from low-cost manufacturing countries, such as Vietnam.

A Commission spokesman said yesterday that no final decision had been taken on whether to extend the tariffs. “We will consult stakeholders. It is a process that will take five or six weeks. There are a significant number of jobs in footwear production,” he said.

Clothing and footwear makers in the EU’s Mediterranean states suffered damaging shocks after 2005, when an avalanche of Asian clothing arrived in EU markets. The surge followed the final unravelling of a complex system of quotas erected to protect Europe from Asian clothing exporters. According to EU figures, footwear imports from China rose by 1,000 per cent in the five-year period to 2005 and 1,000 EU footwear makers closed their doors. Italy’s traditional clusters of small-scale manufacturers and workshops suffered in particular as Chinese footwear imports increased tenfold. The strength of the euro against the dollar also worked in favour of Chinese exporters, whose domestic currency is pegged to the dollar.

The ANCI, Italy’s footwear industry association, said that anti-dumping tariffs had given its members an opportunity to regroup. Manufacturers have launched a “made in Italy” campaign and imports of higher-value leather shoes fell in 2007, while imports of non-leather products continued to rise.

Key to the battle between Europe’s manufacturers and retailers is the issue of country of origin. Italian manufacturers want compulsory labelling of country of origin on clothing and footwear. The debate over country of origin is an important battleground within the World Trade Organisation, where emerging markets oppose compulsory labelling of geographic origin, while many traditional European manufacturers regard it as an emblem of quality and standard.

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