Australia and Vanuatu on Monday signed an economic and security agreement that consolidates Canberra's status as the ​Pacific island state's preferred security and policing partner.

The deal is the latest in a series that Australia has signed with Pacific island nations amid growing rivalry between China and US allies  to gain a security presence in the region.

The agreement was to be ​signed last September, but Vanuatu delayed closing the deal amid concerns that it could restrict ⁠its ​ability to secure infrastructure funding from other ​countries.

What does the Australia-Vanuatu deal stipulate?

The so-called Nakamal Agreement enshrines a commitment by Australia to give greater economic support to Vanuatu, while stipulating that no foreign military base will be established in the latter country.

"What this does do is to provide certainty for Australia that there will be no foreign military base," Australian Prime Minister Anthony Albanese told reporters after signing the deal in Canberra with his Vanuatu counterpart, Jotham Napat.

"It encapsulates Vanuatu's sovereign decision not to permit its territory to be used for any ‌foreign military base or infrastructure and that Vanuatu's critical ‌infrastructure remains ​free from militarization," he said.

Napat confirmed Albanese's statement, saying that "we have in fact passed an act in parliament not to allow any militarization to actually be used for our critical infrastructure."

He said, however, that his country was pursuing a separate economic agreement with Beijing.

When asked if that deal would contain elements relevant to security, he said: "We will share the agreement; there is nothing to hide."

Australia and Vanuatu to cooperate on policing

 The deal also 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.

It also says the two countries will enhance cooperation on "police training and equipment, policing, maritime security, cyber security, intelligence cooperation, and infrastructure."

This element of the deal appears also to aim at countering China's influence, with Beijing offering Vanuatu help with policing since 2023.

Among other things, it has provided its police force with equipment including drones, patrol boats and vehicles.

What role has China been playing in Vanuatu?

China is Vanuatu's largest external creditor.

Chinese banks have provided loans ​to enable Chinese contractors ‌to undertake major infrastructure projects, including the construction of the presidential office complex, parliament building and roads.

China's navy has also regularly visited Vanuatu's ports, while Beijing also paid for the expansion of a wharf in Luganville, where the US once had its largest military base in the South Pacific during World War II. 

That project fueled fears in Canberra and Washington that China was seeking to establish a navy base in Vanuatu.

China has been seeking to extend its security influence in the Pacific region for some time.

Among other things, Chinese police have had a presence in Solomon Islands following the signing of a secret security pact in 2022. 

Edited by: Roshni Majumdar 

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