By AFP | 2026-07-03

CANBERRA -- Australia and Vanuatu signed a sweeping economic and security agreement that bars any foreign military base in the Pacific nation, as Canberra seeks to curb China's expanding security influence in the South Pacific.

The deal was signed June 29 in Canberra by Australian Prime Minister Anthony Albanese and Vanuatu Prime Minister Jotham Napat.

The agreement commits Australia to 500 million AUD ($345 million) in support for Vanuatu, whose largest external creditor is China. It stops a foreign military power from establishing a base there.

"What this does do is to provide certainty for Australia that there will be no foreign military base," said Albanese after signing the deal in Canberra with Napat.

"We have concluded a balanced agreement that will protect our collective and individual security and our sovereignty," he said.

China's navy has made repeated port calls to Vanuatu.

Beijing also funded the expansion of a wharf in Luganville, once the largest U.S. military base in the South Pacific, fuelling concern in Canberra and Washington that China wanted a navy base.

China and Vanuatu previously said the wharf was for cruise ships.

The Nakamal Agreement commits Vanuatu to rejecting the militarization of infrastructure, Napat said.

Military infrastructure

The agreement, viewed by AFP, states that "Vanuatu shall not permit its territory to be used for any foreign military base or infrastructure."

Australia will help Vanuatu develop ports, digital, aviation and energy infrastructure, with Vanuatu agreeing to keep such infrastructure free from "foreign interference" or militarization.

It recognizes Australia as "Vanuatu's longstanding primary policing partner," and says Vanuatu will prioritize policing requests to other members of the Pacific Islands Forum regional bloc.

China formed policing ties with Vanuatu in 2023, and has donated equipment including drones, patrol boats and vehicles to its police force.

The agreement says Australia and Vanuatu will elevate assistance in "police training and equipment, policing, maritime security, cyber security, intelligence cooperation, and infrastructure."

The Vanuatu treaty is the latest in a string of agreements Australia has struck with Pacific island nations, seeking to curb China's expanding security influence.

Chinese police have maintained a presence in the Solomon Islands since signing a secret security pact in 2022.

Vanuatu has said it is separately negotiating an economic agreement with China, which has built roads and government buildings in the South Pacific nation over a decade.

Contest for influence

The Nakamal Agreement does not stop Vanuatu partnering with China on infrastructure but says the Pacific nation will consult Australia when it engages a third party.

A former Australian diplomat in the Pacific, James Batley, said the contest for influence between Beijing and Canberra would continue.

"Vanuatu's long tradition of non-alignment means that it won't simply abandon its relationship with China. Nor will China abandon its attempts to undermine Australia's interests in Vanuatu," he told AFP.

Anna Naupa, a Pacific security researcher with the Australian National University, said the signing was a "significant milestone" after a prolonged period of uncertainty.

Officials from both countries initialed the pact last August in Vanuatu, but Vanuatu raised various concerns over sovereignty that took most of a year to resolve.

Vanuatu has sought better access for its citizens to Australia for travel and work, and agreed to differentiate foreign-born Vanuatu citizens who gained a passport through a controversial investment scheme.

Workers from Vanuatu made a significant contribution to Australia's horticultural sector, Naupa told AFP.