A delegation of Australian ministers ironed out the deal during negotiations on the slopes of Vanuatu's Mount Yasur, a steam-belching active volcano.
Australia was close to clinching a security deal with Vanuatu in 2023, but it was scuppered when the island's lawmakers unexpectedly swapped in a new prime minister seen as less friendly to the West.
Australian Defence Minister Richard Marles said the two sides had now finalised a new agreement, which would be signed in coming weeks.
"It acknowledges that, as neighbours, we have a shared security environment and a committment to each other, which is embodied in this agreement," he said.
Vanuatu Prime Minister Jotham Napat -- elected in February this year -- said the agreement would also cover "economic development and climate resilience".
Across the South Pacific, climate-vulnerable countries are trying to balance relations between the West and China -- seeking to score much-needed funding from both while retaining their hard-won independence.
Many nations in the region are in desperate need of investment, as fragile economies falter and the costs related to climate change grow.
China has in recent years furnished Vanuatu with freshly paved roads, government office buildings, and even a new palace for the country's president.
Solomon Islands bars China and Taiwan from top Pacific summit
Wellington (AFP) Aug 8, 2025 -
Pacific nation Solomon Islands has said it would exclude non-member nations from a key regional summit in September, a group that includes China, Taiwan and the United States.
Prime Minister Jeremiah Manele said earlier this week he would defer a meeting of the Pacific Island Forum's non-member "dialogue partners".
Manele's decision heads off a brewing diplomatic squabble over the presence of Taiwanese diplomats at this year's forum in Solomon Islands' capital Honiara.
There were fears that China -- which counts Solomon Islands among its closest partners in the Pacific -- would use its muscle to see Taiwan excluded.
Solomon Islands recognised Taiwan until 2019, when it switched allegiance to China.
Taiwan and other dialogue partners have historically been allowed to meet with Pacific nations on the sidelines of the forum, known as PIF.
"We know this issue is all about China and Taiwan," opposition politician Peter Kenilorea Jr told parliament earlier this week.
Taiwan's Foreign Ministry said it should be welcomed to this year's meeting of regional leaders.
"Taiwan has adhered to the 'Pacific Way' spirit of diversity and inclusiveness shared by all PIF member countries in our participation in Pacific affairs," it said in a statement.
"Taiwan believes that its participation can sustainably expand cooperation with the PIF, allies in the Pacific, and like-minded countries, and jointly make positive contributions to peace, stability, regional development, and prosperity in the Pacific region."
The regional summit is expected to be a key topic of discussion when the region's top diplomats meet in Fiji's capital, Suva, next week.
The forum will be held in Honiara from September 8 to 12.
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