A Pacific development expert says the delay in the renewal of the 250 million US dollar Compact of Free Association between the United States and Palau does not indicate a change in their relationship.
The comment follows a call from Guam's representative in the US Congress, Madeleine Bordallo, for it to renew the agreement, which was delivered to Congress last January after nearly two years of negotiations with Palau.
Congresswoman Bordallo says continued delays in the Compact's renewal may jeopardise the US' diplomatic relations and political capital with its allies in the region.
Dr Gerard Finin, who co-directs the Pacific Islands Development Programme at Hawaii's East-West Centre, agrees.
"It's mutually beneficial and of critical importance to both Palau and the United States and so that's why even though there has been this delay I don't think it alters the fundamental basis for the relationship which has really gone pretty well since the time of Palau's independence."
However Dr Gerard Finin says the delay places Palau in a financial bind.