Australia on Friday said it would drop a case against China at the World Trade Organisation, after Beijing lifted hefty tariffs on the country's barley exports.
"We welcome this outcome, which paves the way for our barley exporters to re-enter the Chinese market -- benefiting Australian producers and Chinese consumers," Foreign Minister Penny Wong said in a statement.
China said Friday it will remove extra tariffs on Australian barley, in the latest thawing of ties between the two after years of tensions.
"The Ministry of Commerce has ruled that it is no longer necessary to continue to impose anti-dumping duties and countervailing duties on imports of barley originating in Australia in view of changes in the Chinese barley market," the department said in a statement.
China slapped hefty levies on key Australian exports such as barley, beef and wine in 2020, leveraging its economic muscle at the height of a bitter dispute with the former conservative government.
It also stopped imports of some of Australia's most significant export commodities, including coal, curbing billions of dollars in trade.
China had been angered by Canberra's legislation against overseas influence operations, its barring Huawei from 5G contracts and its call for an independent investigation into the origins of the Covid-19 pandemic.
But their icy relations appear to have thawed since Australia's centre-left government adopted a less confrontational approach to China following its election a year ago.
Chinese President Xi Jinping called for relations with Australia to "improve" in a November 2022 meeting with Prime Minister Anthony Albanese.
It was the first formal summit between the two countries in more than five years.
Australia has this year resumed exports of coal and timber, which were among a slew of commodities hit by Chinese import bans and restrictions as diplomatic relations soured in recent years.
And trade minister Don Farrell told reporters in June that barley was “the next cab off of the rank” following a "good meeting" with his Chinese counterpart, Wang Wentao, in Detroit.
Pending the Chinese decision, Australia had suspended a World Trade Organisation challenge over the barley tariff, which has effectively blocked the commodity since it was imposed in May 2020.
Barley exports to China were worth about Aus$916 million (US$600 million) in the 2018-19 season.
Farrell said he is also keen to get quality Australian wine back into China by removing anti-dumping measures imposed since November 2020, adding that he had seen growers "leaving grapes to wilt on the vine rather than suffer the uncertainty of the global market".