THE sun could again shine on the Australian wine industry's trade relationship with China following high level talks about tariffs imposed in 2020.

Brown Family Wine Group (BFWG) has backed the Federal Government trade talks with China that could lead to the easing of prohibitive tariffs on wine exports from Australia, which has cost the industry $1 billion per annum since 2020.

The government has reached an agreement with China that creates a pathway towards resolving the dispute over Australian barley, and Trade Minister Don Farrell is confident in a favourable outcome for Australian wine as well.

In 2020, China imposed tariffs of 80.5 per cent on barley and up to 212 per cent on wine, making export of these commodities to the country unviable.

"If the agreement is successful in providing a pathway for lifting duties on barley, we expect a similar process to be followed to remove trade barriers for Australian wine," Mr Farrell said.

BFWG executive director Ross Brown said "it's critical" the agreement goes through as Australia's wine industry is in a very tough position at the moment given the loss of the $1 billion market.

"Consequently, any reversal of the tariff is extremely important and quite critical for the health and growth of the industry going forward," Mr Brown said.

"China was our largest export market and to suddenly lose this overnight...it takes many years to build these markets.

"You don't suddenly turn the switch and get a new market, certainly not as diversified as China.

"We've had quite a lot of success in broadening our export base, particularly to other Asian markets and back into the UK but it hasn't replaced the importance of China in the overall scheme of things."

Brown Brothers had invested 10 years of work in brand building and customer relationships in China and the growth of the business depends greatly on being able to service the demand from China in the future.

"This represented 30–40 per cent of our export market, but it is about investing in the future because when you've got 1.3 billion people who are new and emerging wine drinkers, it's an incredibly big opportunity," Mr Brown said.

"When you cast your eye over the other wine markets in the world, China, looking to the next 10 years, is certainly the most important opportunity for Australia."

Mr Farrell said following recent constructive dialogue at all levels, the Australian Government welcomes China's agreement to undertake an expedited review of the duties over a three–month period, which may extend to a fourth if required.

"This dialogue has taken place in parallel to Australia continuing to prosecute our national interests through the World Trade Organisation (WTO)," he said.

"Australia has agreed to temporarily suspend the WTO dispute for the agreed review period.

"If the duties are not lifted at the end of the review period, Australia will resume the dispute in the WTO."

The WTO trade disputes system encourages bilateral resolution where possible.

The Australian Government will continue to pursue our national interests through dialogue and the multilateral trading system.

Mr Farrell said they will use all opportunities, including the WTO dispute mechanism, to get the best outcomes for Australia's world–class producers and farmers.

"The Albanese Government's approach has been to cooperate with China where we can, disagree where we must and engage in our national interest," he said.