Australia and Vanuatu Seal Landmark Security and Economic Agreement

Australian Prime Minister Anthony Albanese (L) and Vanuatu’s Prime Minister Jotham Napat attend a joint press conference at Parliament House in Canberra, Australia, on June 29, 2026. David Gray/AFP via Getty ImagesAfter a false start and years of negotiating, Australia and Vanuatu have signed the long-awaited Nakamal agreement following a meeting in Canberra between Prime Minister Anthony Albanese and his Vanuatuan counterpart Jotham Napat on June 29.Albanese travelled to Port Vila in September last year hoping to secure sign-off on the $500 million (US$345 million) agreement, only to return empty-handed after members of the Pacific nation’s cabinet raised concerns about a perceived loss of sovereignty and fears the deal would prevent China from funding infrastructure projects.That was despite Napat saying it was a “win-win” just a month earlier.Then Vanuatu warned Australia to respect a pending policing agreement with Beijing, which is also keen to cement ties with a country that offers it a strategic advantage.According to Albanese, the agreement enshrines Vanuatu’s sovereign decision not to permit its territory to be used for any foreign military base or infrastructure, and to keep its critical infrastructure free from militarisation.“We respect the right of all nations to make sovereign decisions about their engagement with other countries,” he told reporters on June 29.“But what this does do is to provide certainty for Australia that there will be no foreign military base. That we’ll prioritise policing cooperation with Pacific Island Forum members—something that we’ve asked for across-the-board—and that there will be any consultation on any third-party engagements in critical infrastructure.”Albanese also said that under the Nakamal agreement, Vanuatu remained committed to seeking support from Pacific Islands Forum members, including Australia, for its policing needs.“We’ve concluded a balanced agreement that will protect our collective and individual security and our sovereignty. And it will support our interest in a stable, prosperous and secure region that we both call home,” he said.“Importantly, this agreement advances the consensus that security is a shared responsibility of the Pacific family, the members of the Pacific Islands Forum.”Vanuatu Not Restricted from Accept Foreign FundingThe agreement will not restrict Vanuatu from accepting funding from other countries. However, it requires the country to “consult Australia on proposed third-party engagement” in relation to its critical infrastructure.Napat said Vanuatu had passed a law forbidding any militarisation of its critical infrastructure.While Albanese did not confirm whether the agreement was still worth $500 million over the next decade, he said the final figure would be revealed in December as part of the Mid-Year Economic and Fiscal Outlook (MYEFO).He also highlighted that the Nakamal deal will support the economic development of Vanuatu.“That is in the interests of the people of Vanuatu, but it’s also in Australia’s national interest as well, to have economic development in our region. That is one way in which you ensure that security in the region, prosperity in the region,” Albanese said.China is also negotiating its own pact with Vanuatu—the Namele Agreement—which has yet to be signed. However, Napat said the agreement was awaiting “clearance from Beijing”.“We will share the agreement. There is nothing to hide. Our government is transparent. And I am so grateful that the Prime Minister has also given me the clearance to share the Nakamal agreement,” he said.“Today marks a significant step in the Vanuatu-Australia relationship.“With the signing of the long-awaited Nakamal agreement, Australia and Vanuatu are close neighbours, trusted partners.”