China lifts major trade sanctions, Labor claims vindication for 'calm' approach

China has announced it will reverse a major tariff on Australian barley, in a sign bilateral relations are thawing.

China will lift major trade sanctions against some Australian produce.

KEY POINTS:

• China will lift tariffs on Australian barley, which have been in place since 2020.
• The 80 per cent tariffs were the subject of a formal dispute at the World Trade Organisation.
• Penny Wong says the decision benefits Chinese consumers and Australian producers.

Foreign Minister Penny Wong says Labor's "calm and consistent" approach to China is being vindicated, after Beijing announced it would lift long-running tariffs on Australian barley.

The sanctions were first imposed under the former Coalition government in 2020, when tensions mounted over Australia's support of calls for an independent investigation into the origins of the COVID-19 pandemic.

The 80 per cent tariff was the first salvo in an escalating trade war between the two countries, which saw Beijing slap restrictions on a host of other Australian products - including wine, timber, and beef.

Penny Wong says Labor's more temperate approach to the Australia-China relationship is being vindicated. Source: AP / Zhang Ling

But Wong said the government had been informed on Friday that the sanctions would be lifted.

Wong described the decision, which will come into effect on Saturday, as "the right outcome" for Australian producers and Chinese consumers.

"[This decision] affirms the approach, the calm and consistent approach, that the Albanese government has taken ... on these issues. The removal of the [tariffs] is the result of work by government and industry to resolve this matter," she said.

Labor has made improving the relationship a priority, with senior ministers taking part in a series of head-to-head meetings with their Chinese counterparts.

That culminated in a meeting between Prime Minister Anthony Albanese and Chinese President Xi Jinping in November, the first time an Australian leader had held formal talks with the Chinese premier since 2016.

Wong travelled to Beijing just before Christmas, saying at the time that Australia would continue to "cooperate with China where we can and disagree where we must".

Trade Minister Don Farrell said Labor would "use this process as a template" for resolving outstanding sanctions, which remain on Australian wine.

Don Farrell says Australia will use the process as a "template" for a separate dispute on wine. Source: AAP / Lukas Coch

"The dialogue and the goodwill and, I must say, the patience and the persistence have proven effective in helping Australian barley growers and exporters to achieve an expedited outcome," he said.

"That's the important part of what we've done here."

Australian barley exports to China were valued at around $1 billion just two years before they were sanctioned, and Friday's decision means Australia will drop its complaint to the World Trade Organisation (WTO) over the tariffs.

Wong said Australia remained "confident" about a separate WTO complaint over China's ongoing wine tariffs.