Australia's ties with Vanuatu will go to "the next level", despite the two countries failing to sign off on a long-awaited security and economic agreement, the prime minister says.
Anthony Albanese held talks with his Vanuatu counterpart Jotham Napat in Port Vila on Tuesday, before a visit to the Solomon Islands for the Pacific Islands Forum.
There was expectation the Vanuatu visit would feature both leaders signing off on the $500 million Nakamal security pact, following months of negotiations.
But Mr Napat indicated more time was needed by the Vanuatu government to consider the agreement, with concern it could restrict the Pacific nation's ability to get funding from other countries for critical infrastructure.
The Nakamal agreement is believed to carry a significant security element, though the full details have not been released.
That might focus on decreasing China's policing presence in Vanuatu, similar to Australia's pact with the Solomon Islands to reduce Chinese officers in exchange for budget aid and expanding the local police force.
Mr Albanese said he believed a deal would soon be agreed.
"I respect the processes that Prime Minister Napat needs to go through. Both sides will go through our processes, but we're very confident that the agreement can be reached," he told reporters in Vanuatu on Tuesday.
"Our bilateral partnership is going to go to the next level."
Fears over China's ambitions to gain a security foothold in the Pacific, including the risk of establishing a military presence, have been heightened since Beijing stunned the region in 2022 by striking a security agreement with the Solomon Islands.
Vanuatu's prime minister said further deliberation was needed before a deal could be reached.
"Some of my ministers and my MPs feel it requires more discussion, particularly on some of the specific wordings in the agreement," Mr Napat said.
Mr Albanese said Australia would want economic development in Vanuatu and an upskilling of the country's workforce as part of the agreement.
"We want to make sure that the Pacific look after each other, consistent with what we did at last year's Pacific Island Forum meeting," he said.
"We respect (Vanuatu's) sovereignty, which is why we respect the discussion that we've had together today. If that means people going through processes for a short period of time, then that is absolutely fine by us."
The visit to Vanuatu was the first by Mr Albanese as prime minister and only the second by a sitting leader.
Before talks with Mr Napat, Mr Albanese visited State House, where he made a courtesy call to Vanuatu President Nikenike Vurobaravu.
