China lifts tariff on Australian barley in a sign of improved relations

China is lifting a stifling 3-year-old tariff on Australian barley starting Saturday a sign of an improving bilateral trade relationship since Australia's government changed.

China effectively closed its door to Australian barley in May 2020 by imposing an 80.5 per cent tariff after the previous Australian government angered Beijing by calling for an independent inquiry into the origins of, and responses to, the COVID-19 pandemic.

On Friday, both governments confirmed the resumption of trade in the grain that was worth 916 million Australian dollars (USD 602 million) in the year before China blocked imports.

Australian Prime Minister Anthony Albanese welcomed the breakthrough, which comes as he plans his first visit to Beijing as government leader before the end of the year.

This is a very positive decision, Albanese told reporters.

When Albanese's government was elected in May 2022, he demanded Beijing drop a series of official and unofficial trade barriers against Australian exports including barley, wine, coal, beef, wood and seafood that were costing producers USD 15 billion a year.

China's Ministry of Commerce said in a statement it ruled that in view of the changes in China's barley market, it was unnecessary to continue to impose anti-dumping duties and countervailing duties on imported barley originating in Australia.

The ministry gave no details of the decision, nor did it explain the market changes.

Australia has denied China's claims that it subsidised barley and wine to export it at artificially low prices, a process known as dumping.

In April, Australia suspended a complaint to the World Trade Organisation in a bid to reopen the Chinese market to barley. In exchange, China had agreed to review its duties on the grain.

With the barley trade reopened, the Australian government said it expects China will lift its trade barriers to Australian wine.

Australia's complaint over wine remains before the Geneva-based WTO.

China is Australia's biggest trading partner, with two-way trade totalling USD 287 billion in 2022.