Australian Foreign Minister Penny Wong speaks during a Quad Ministers' panel at the Taj Palace Hotel in New Delhi, India on March 3, 2023 (Reuters)

Australia indicated on Tuesday that it was getting closer to "stabilizing" its fraught relationship with China, as the two countries moved to solve a trade dispute over barley exports.

The once-warm trading relationship has soured in recent years as Australia sought closer military ties with the United States.

Beijing imposed hefty tariffs on key commodities such as barley, beef, and wine in 2020 at the height of a bitter dispute inflamed by Australia's former conservative government.

Australia retaliated by complaining to the World Trade Organization, claiming that China had breached international obligations by artificially jacking up tariffs "without justification".

But the country's center-left government has adopted a far less confrontational stance since its election in May last year, prioritizing the resumption of trade.

In the latest sign of thawing tensions between the countries, Australian Foreign Minister Penny Wong said her country would be temporarily suspending its complaint after China had agreed to review its barley tariffs.

"We have made it clear that we believe there's no justification for the measures that China introduced in relation to barley," Wong told reporters.

"We have also made clear that we believe it is in both countries' interests for these trade impediments to be removed," she added.

Wong, who visited Beijing in December, said this demonstrated Australia was slowly "stabilizing the relationship with China."

The tariffs, as well as an unofficial ban on Australian coal, are estimated to have cost more than Aus$5 billion (US$3.47 billion) in lost revenue from China.

Meanwhile, Beijing has confirmed that Chinese Vice Minister for Foreign Affairs Ma Zhaoxu will travel to Australia later this week, making him one of the most senior officials to visit in years.

Australia faces a difficult balancing act -- China is its largest trading partner, but the United States is a crucial military ally.

Australia, China hold 'professional' defense talks: Spokesperson

A couple of weeks ago, officials confirmed that China and Australia held defense talks focused on regional security issues, just days after Beijing condemned Canberra's plan to deploy a fleet of nuclear-powered submarines.

An Australian defense spokesperson confirmed that Australian defense officials hosted a team from the People's Liberation Army (PLA) for the discussions in Canberra.

The half-day talks were the latest sign that China and Australia are re-engaging after a diplomatic freeze.

China warned Australia, Britain, and the United States that they were walking "a path of error and danger" after their March 13 announcement of a long-term deal to equip Australia with nuclear-powered submarines armed with cruise missiles

Australia plans to buy up to five US nuclear-powered submarines, then build a new model with US and British technology.

The decades-long deal has sparked debate about the cost -- hundreds of billions of dollars over three decades -- and the strategy of Australia binding its future defense to the United States and Britain.

Australian Defense Minister Richard Marles said he was pleased that "normal dialogue" had resumed but declined to give further details of the discussions.

According to the Australians, the talks -- "conducted in a professional atmosphere" -- were the first formal meeting of the two countries' defense officials since 2019.