Vanuatu - Foreign policy
In 2002, Natapei positioned Vanuatu as a peaceful nation with a welcoming government and able workers fluent in both French and English, a prime target for foreign investors. He encouraged agricultural development and internet businesses, and actively promoted Vanuatu's banking services as well as its gambling facilities. Citing Vanuatu's abundant energy potential, including geothermal, wind, and hydroelectric resources, he encouraged companies interested in energy self-reliance to come to Vanuatu.
Vanuatu's continuing dependence on foreign aid connects foreign policy to domestic economic concerns. Vanuatu benefits from its association with Australia, and is dependent upon the nations of the European Union (EU) for funds for development projects. The Lome Convention, a program through which Vanuatu and other African, Caribbean, and Pacific (ACP) countries received aid from the EU, expired in February 2000. It was replaced by the Cotonou Agreement in June of the same year. This agreement is a 20-year aid and development plan aimed at the elimination of poverty in the ACP countries. In 2002, Prime Minister Natapei signed an agreement with the EU giving Vanuatu US $14 million over five years for development projects in Vanuatu. Vanuatu completed negotiations to join the World Trade Organization (WTO) in October 2001.
The Natapei government is actively in communication with other small island nations as well as nations outside its geographic area. Vanuatu is an member of the Melanesian Spearhead Group, and also of the Pacific Islands Forum, a group sharply critical of the failure of the United States to sign the Kyoto Protocol limiting the production of greenhouse gases.
At the South Pacific Forum in June 1999, Vanuatu supported a Pacific Free Trade Area (FTA) that would initially include 14 countries in the region, with the possibility of future expansion. The agreement to create the FTA was signed in 2001. The South Pacific FTA would buffer its members against the expiration in 2006 of the WTO waiver for the U.S. Compact of Free Association, which selectively offers trade preferences to member countries. An official of the South Pacific Forum mentioned Vanuatu's production of kava and beef as an example of the regional diversity of goods that can be traded to the mutual benefit of FTA member nations. In May 2003 the OECD removed Vanuatu from its list of island tax havens.
In September 2000, Vanuatu policemen were sent to Timor as part of the UN Peacekeeping Forces. This was Vanuatu's first peacekeeping mission outside the Pacific Islands region. Later in the year, Vanuatu also sent troops to Bosnia.
Vanuatu supports the one-China policy, and celebrated 20 years of diplomatic relations with Beijing in March 2002.
Natapei opposed the U.S.-led war on Iraq in the spring of 2003, saying he would only join the Coalition of the Willing if the war had the support of the United Nations. He reaffirmed his opposition to terrorism in any form but criticized the coalition for damaging the credibility of the UN.