Vanuatu intends to sign a revised Nakamal agreement on a government visit to Canberra this week after its council of ministers approved an updated version of the pact between the Pacific nation and Australia.

The bilateral partnership is formalised to strengthen cooperation over security, economic development, climate resilience, infrastructure and labour mobility.

Australian Deputy Prime Minister Richard Marles, Minister for Foreign Affairs Penny Wong and Minister for Pacific Island Affairs Pat Conroy initiated the deal in August last year during a trip to Vanuatu.

There have been a number of sticking points for Vanuatu Prime Minister Jotham Napat, who will lead a ministerial delegation to negotiate on sovereignty, security and infrastructure concerns.

"A lot of the wording in the Nakamal Agreement undermined our sovereignty," Mr Napat told the Vanuatu parliament last month.

Mr Napat said the council of ministers, which he has overseen since February 2025, were all "resolute that Vanuatu cannot sign anything that undermines its sovereignty".

He believed the strategic agreement could be a "win-win" arrangement for both countries, while adding to Vanuatu's long-standing policy of remaining "friends to all and enemies to none".

The agreement reportedly allows either side to return to the table should they disagree on some of the provisions, which has been the cause for the delay in signing the pact and why Vanuatu is also confident it will gain a reasonable deal from Australia.

But it is also in Vanuatu's best interests to sign the security and development deal, reportedly linked to a $A500 million assistance package over the next 10 years.

The drawn-out negotiations have attracted a great deal of attention due to visa issues.

Vanuatu was not considered in the latest Pacific Engagement Visa scheme, which had included 11 other Pasifika nations, even extending to Timor-Leste.

The Australian government was recently quizzed by several media outlets on why Vanuatu was excluded for the upcoming intake, amid speculation it had been over the Melanesian country's failure to come back to the table sooner.

Australia's Department of Home Affairs website confirms registrations for the 2026-27 program opens Wednesday, July 1, and offers up to 3000 permanent residency places, however Ni-Vanuatu residents are ineligible.

Thousands from Vanuatu have previously applied for Australian residency through the specific visa, though just 150 from the country have been successful in each of its two years.

Nauru has also been left off the list, losing its previous 100 places, however Tuvalu and the Marshall Islands have been added with 100 and 50 places respectively.

Papua New Guinea — in comparison — has gained at least 1350 places for its residents in the scheme, far the largest intake from any Pacific nation.

The Department of Foreign Affairs and Trade said Australia was approaching the process as "equal partners" and has been patient and respectful of Vanuatu's domestic processes.

The DFAT spokesperson said Australia was willing to respond to Vanuatu's priorities while looking to seek to match their ambition of the Nakamal agreement.

However, the Vanuatu government confirmed it has not been informed of the separate decision as to why Ni-Vanuatans had been excluded from the Pacific Engagement Visa scheme.

Vanuatuan government advisor Glen Craig believed the timing between the Nakamal deal and the omission of the visa was hard to ignore.

"Vanuatu (is) holding firm on the priorities it has stated plainly from the outset," Mr Craig said, via LinkedIn.

Mr Napat had intimated he would not sign unless Australia agreed to the condition of visa-free travel for his citizens, something Canberra had apparently never offered to any of the other Pacific Island states.

The removal of the Pacific Engagement Visa has prompted questions in Port Vila, particularly given the timing of wider negotiations and considering Vanuatu had been part of the inaugural scheme.

Mr Napat has dismissed the ambiguity, saying there will be an agenda item on visa-free travel in the Nakamal agreement while saying he expects Australia "would get back to us on that".

Australia has long viewed Vanuatu as a strategically-important ally because of its location in the Pacific following concerns about possible Chinese security influencing the country.

Mr Napat, however, told parliament last month Vanuatu's separate Namele agreement with China is more of a strategic cooperation arrangement and "has nothing to do with a security pact".