Treaty
There were three major elements to the Methuen Treaty. The first was the establishment of the war aims of the Grand Alliance. Secondly the agreement meant that Spain would become a new theatre of war. Finally, it regulated the establishment of trade relations, especially between Britain and Portugal.
Until 1703 the Grand Alliance had never established any formal war aims. The Methuen Treaty changed this as it confirmed that the alliance would try to secure the entire Spanish Empire for the Austrian claimant to the throne, the Archduke Charles, later Charles VI of Austria.
The Treaty also established the numbers of troops the various countries would provide to fight the campaign in Spain. The Portuguese also insisted that Archduke Charles would come to Portugal to lead the forces in order to ensure full allied commitment to the war in Spain.
In addition, the Treaty helped to establish trading relations between England and Portugal. The terms of the Treaty allowed English woolen cloth to be admitted into Portugal free of duty. In return, Portuguese wines imported into England would be subject to a third less duty than wines imported from France. This was particularly important in helping the development of the port industry. As England was at war with France, it became increasingly difficult to acquire wine and so port started to become a popular replacement.
The Treaty, signed 27 December 1703, was subsequently known colloquially as the "Port Wine Treaty".
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